Retirement income strategies designed in an expected utility framework

Authors

  • Mark Warshawsky ReLIAS LLC

DOI:

https://doi.org/10.61190/fsr.v26i2.3304

Keywords:

Retirement income strategies, Systematic withdrawal, Life annuity, Advanced life delayed annuity (ALDA)

Abstract

Various classes of retirement income strategies are evaluated and their robustness tested in an expected utility framework. Fixed percentage systematic withdrawals from an investment portfolio combined with laddered purchases of immediate life annuities stands out as a superior strategy for retired defined contribution plan participants and IRA holders, yielding better outcomes than alternatives, including longevity insurance. This broad strategy is then applied, step by step, and customized across a wide range of household risk preferences and situations, with due consideration of product costs, taxes, and economic risks and returns.

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Published

2017-06-30

How to Cite

Warshawsky, M. (2017). Retirement income strategies designed in an expected utility framework. Financial Services Review, 26(2), 113–141. https://doi.org/10.61190/fsr.v26i2.3304

Issue

Vol. 26 No. 2 (2017): Summer 2017

Section

New Original Submission

License

Copyright (c) 2014 Academy of Financial Services

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