Down the Retirement Risk Zone with Gun and Camera

19 Pages Posted: 24 May 2014  

Geoffrey Kingston

Macquarie University

Lance A. Fisher

Macquarie University - Department of Economics; Macquarie University, Faculty of Business and Economics

Date Written: October 15, 2013

Abstract

The retirement risk zone represents a fragile period in the financial life cycle of people in defined-contributions superannuation. It primarily affects people of middle means. Sequencing risk has been described as an independent risk but it has largely been a consequence of the dominant asset allocation strategy, described here as aggressive constant-mix. Lifetime glide paths should instead resemble a displaced V: the share of growth assets should fall by something like 20 to 50 percentage points over working life, then another 5 or 10 percentage points on the day of retirement, but should subsequently rise through retirement, by something like 20 to 30 percentage points.

Keywords: constant-mix strategy, defined contributions superannuation, glide paths, retirement risk zone, sequencing risk

Suggested Citation

Kingston, Geoffrey and Fisher, Lance A., Down the Retirement Risk Zone with Gun and Camera (October 15, 2013). CIFR Paper No. 005/2014. Available at SSRN: https://ssrn.com/abstract=2440977 or http://dx.doi.org/10.2139/ssrn.2440977

Geoffrey Kingston (Contact Author)

Macquarie University ( email )

North Ryde
Sydney, New South Wales 2109
Australia

Lance A. Fisher

Macquarie University - Department of Economics ( email )

Sydney NSW 2109
Australia

Macquarie University, Faculty of Business and Economics ( email )

Australia

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