Refining the Failure Rate

Posted: 21 May 2019

Date Written: October 13, 2016


The relevance of determining how often a retirement strategy failed in the past, and how likely it is to fail in the future, can hardly be overstated. For this reason, the failure rate has become an essential tool when evaluating these strategies. However, this variable is silent about how long into the retirement period a strategy failed; two strategies that sustained withdrawals for 10 and 25 years of a 30-year retirement period have both failed, but a retiree would be far from indifferent between them. The two variables proposed here, which seek to refine and complement, not to replace, the failure rate aim to correct this shortcoming.

Keywords: failure rate, retirement strategies

JEL Classification: G11

Suggested Citation

Estrada, Javier, Refining the Failure Rate (October 13, 2016)., Available at SSRN: or

Javier Estrada (Contact Author)

IESE Business School ( email )

IESE Business School
Av. Pearson 21
Barcelona, 08034
+34 93 253 4200 (Phone)
+34 93 253 4343 (Fax)

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