<!-- Swiftype Variables -->

White Papers

Rethinking Portfolio Analysis - Living Standard Risk & Reward Over the Life Cycle

Investors can reduce “living standard risk” by using a life-cycle financial planning framework to develop better spending, saving and investment decisions. All investors face risks but the ability to spend at a desired level in retirement should be the ultimate concern. Spending too aggressively can be as risky, or riskier, as investing aggressively when determining one's future standard of living.

Financial planning and portfolio management tools tend to focus on the tradeoff between expected returns and risk. We demonstrate that more holistic life-cycle planning can help decision-making and reduce living standard risk. Our research was based on Canadians who must decide whether to invest globally and, importantly, whether to hedge the associated exchange rate risk. A life-cycle planning tool can support investors in making spending and investment decisions to manage risks to their living standards.

Authors: Alain Bergeron, MSc, CFA, Mackenzie Investments; Laurence Kotlikoff, PdD, William Fairfield Warren Professor of Economics at Boston University; Todd Mattina, PhD, Mackenzie Investments; Allan Seychuk, CFA Mackenzie Investments

  view more white papers

By downloading a white paper, you are agreeing to have your contact information shared with the content sponsor, who may then contact you.

All white papers posted were created by the listed authors who are solely responsible for the research, finding and all materials contained therein. Pensions & Investments has not verified or edited the materials (other than for length and style) and does not necessarily agree or disagree with the analysis and positions expressed by the authors. Reference to any company, product or service does not imply recommendation or sponsorship by Pensions & Investments.

For more information on submitting a white paper, please contact Richard Scanlon at rscanlon@pionline.com or 212-210-0157.