Michael Kitces published this blog article yesterday which some might find interesting (or confirm their thoughts on the subject): https://www.kitces.com/blog/best-ret...o-you-measure/
Here is the introduction at the beginning of the article:
"Given the myriad of products and services available to today’s prospective retirees, there are a lot of choices to consider about which retirement income strategy to pursue, from portfolio-based withdrawal strategies to annuities with income guarantees and more.
Yet as it turns out, what seems like a relatively simple question – which retirement income strategy is the best – is actually remarkably difficult to determine. Because as it turns out, which is “best” depends heavily on how you measure
what “best” really means in the first place.
For instance, when evaluates by what produces the most wealth, the best retirement strategy is generally to just not spend very much (and ideally invest for growth along the way, too)! If the goal is to maximize retirement spending, then the “best” strategy is the invest as aggressively as possible, to maximize the portfolio growth that will substantiate that spending. Yet portfolios with maximal growth can also produce the greatest catastrophes, which means a risk-averse retiree may not want that approach, even if it would otherwise have increased retirement spending!
What all of this ultimately means is that in framing different retirement income strategies – and the trade-offs they might entail – it’s important to give serious consideration to the measuring stick that will be used to evaluate the potential retirement outcomes. Because the “best” retirement income strategy may be very different depending on whether you measure based on wealth, spending, probabilities of success, magnitudes of failure, or utility functions that weigh both the upside and downside risks!"
For me, it seems rather intuitive that my "best" retirement income strategy is probably different from yours simple because our needs and eventual outcome is probably different - I might need more money at the beginning of retirement and not worry about leaving much of an inheritance (sorry kids
). You might want to leave more to your kids or favorite charity.
There is an active discussion on this article over at bogleheads.org.