“Greater rewards, lower costs”


Towards a sustainable retirement plan



As financial planners we often build retirement advice around certain core assumptions, but what if that foundation is not rock solid after all? Should we assume that return assumptions that may have worked very well in the recent past will continue to hold in the future, or should we be aware of more possibilities and thus demand a greater margin of safety whenever we advise on these matters?  


I specifically aimed in this research paper not to be too formal or academically orientated and rather to tell the story as it is and thereby making the paper more accessible to a potentially wider audience – to the people that actually may need to be informed on some of the important findings of this report. Notwithstanding, I did not compromise on the quality of research.


In keeping with the less academic style of this paper one will find the problem setting of this research project in the sketch of a hypothetical investor’s financial situation at retirement. I will investigate the problem of conventional assumptions about expected returns and why this could be erroneous going forward. I will present a number of situations where what we believe is “safe” today was not always safe in the past. But eventually I present a solution that would have worked under all possible return scenarios in the past, based on the best historical data at our disposal. I also consider different scenarios and how the optimal solution would have changed in each case. Finally, I summarise the main findings of the research report and discuss the implications thereof for investors and financial planners.    


At the end I present a very readable and insightful report that challenges the way we think about retirement – alas, retirement begins at retirement, but its planning and financial success starts long before that!



Download an abridged presentation: Towards a sustainable retirement plan

The full report will be e-mailed upon request.




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