After 70 Years of Fruitful Research, Why Is There Still a Retirement Crisis?

Laurence Uncategorized

Even in 1797, the 22-year-old author Jane Austen, patron saint of annuitants, understood why issuers of lifelong income promises might be unhappy about their side of the deal and why beneficiaries of such income guarantees are presumably happier. Austen understood time risk and longevity risk—the principal risks that individuals saving for retirement should be concerned about—better than most of today’s …

The Only Spending Rule Article You Will Ever Need

Laurence Articles

After examining an array of approaches to determining a spending rule for retirees, the authors propose the annually recalculated virtual annuity. Each year, one should spend (at most) the amount that a freshly purchased annuity—with a purchase price equal to the then-current portfolio value and priced at current interest rates and number of years of required cash flows remaining—would pay …