IRIC’s Kevin Crain urges plainer retirement income language for client talks

Kevin Crain, executive director of the Institutional Retirement Income Council, wants advisors to simplify the language they use for retirement income options. He points to a 2013 National Bureau of Economic Research study reported by PLANADVISER. The study found 72% of respondents wanted an annuity presented as payments to be used for spending, while 21% wanted it presented as an investment.

Crain's essay, 'Say This, Not That: Why Language Matters in Retirement Income Planning,' accompanies IRIC's Proposed Retirement Income Language Framework. The framework's core instruction is definitional: 'retirement income' should name an overall category of need, not a synonym for any single product. Crain wrote that the issue is not stylistic. A plan sponsor cannot compare solutions when two providers use one word to describe different structures.

For advisors, the practical application starts with replacing 'systemic withdrawal' with 'monthly benefit distribution.' Crain, who worked as a recordkeeper, says most industry jargon originated with recordkeepers and plan providers, and he recommends advisors and plan sponsors use simpler language when dealing with participants.

'People don't pay attention to things in detail; we know that,' Crain said, according to PLANADVISER. 'Simplifying terminology will absolutely help people better understand and make better decisions.'

Crain says standardization across industry groups is achievable. He points to the Defined Contribution Institutional Investor Association’s glossary of decumulation terms, released in 2021. He was encouraged by a recently passed federal bill awaiting President Donald Trump’s signature that clarifies terminology around Social Security claiming ages.

IRIC has pressed the same terrain from a different direction. An August white paper argued the last mile of retirement is a spending problem, and a companion report described the behavioral biases that stall decumulation along with the nudges advisors can use to move a client from saving to spending.