The August issue of the Journal of Financial Planning has 3 articles on the spend-down phase or as they put it "Portfolio Decumulation"
Journal Home Page
There is an interesting article on Modern Portfolio Decumulation: A New Strategy for Managing Retirement Income
He proposes:
- Annuities are a legit part of a retirement portfolio to hedge longevity risk.. The question is when (if at all) it makes sense to include it. He suggests a "check" to see if it is needed. I think we'll see a "Walmart" or "Dell" of the annuity business come in and eliminate the excessive fees.
- Portfolios behave differently when there is an regular outgoing cash flow than in the building phase when there is a regular incoming cash flow.
- Dynamic asset allocation to match the ability of your portfolio to deliver the cash flow you need. Not sure if I understand this concept. Will need to read it again.
I think we're going to see a lot of new ideas on the best way to draw down our retirement portfolios while handling market, inflation and longevity risks.
The only issue I have is finding the time to read this stuff while I'm still working!!
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