Dynamic DC: Keeping Your Options Open
12 Pages Posted: 29 May 2013 Last revised: 21 Oct 2018
Date Written: May 28, 2013
Retirees face a tradeoff between two goals, payment certainty and liquidity. Annuities address the former at a cost of the latter. This article lays out an investment approach that aspires to achieve both goals. The heart of this approach is a dynamic investment strategy aimed at sustaining a steady income stream while also minimizing the risk of running out of money. The result is a defined-benefit-like outcome in a defined contribution pension-plan structure.
Keywords: Decumulation, Defined Contribution, Life-Cycle Fund, Pension Fund, Target-Date Fund
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