Principles and Rules for Translating Retirement Objectives into Strategies

Abstract

This article sets out principles and decision rules for setting appropriate drawdown and investment strategies during retirement given an individual’s objectives and risk tolerance. In particular, we highlight how the suitable drawdown strategy can relate to the objective, and how annuities might be combined with other investments to help manage risk. Our aim is to offer research-based guidance to product providers, financial advisers and individuals in formulating retirement strategies.

Keywords: Retirement savings, portfolio choice, drawdown strategies, product design, financial planning

JEL Classification: D14, D91, E21, G11, G23