RT Journal Article
SR Electronic
T1 Addressing Key Retirement Risks
JF The Journal of Retirement
FD Institutional Investor Journals
SP 67
OP 80
DO 10.3905/jor.2014.2.2.067
VO 2
IS 2
A1 David Blanchett
YR 2014
UL https://pm-research.com/content/2/2/67.abstract
AB This article introduces a new model to jointly determine the optimal allocation to equities, real assets, and annuities for a retiree with a given set of preferences. This model improves on a number of existing retirement income models by directly incorporating a cost associated with deviating from the investor’s target risk preference, jointly testing the effects of four preference variables—aversion to volatility, strength of a bequest motive, preference for sustainable expenditure, and sensitivity to the risk of future inflation—using a dynamic withdrawal strategy and taking a probabilistic approach to mortality.TOPICS: Retirement, risk management, portfolio construction