Re:True Link (YC S13) is launching an investment division
by nandemo on Monday November 21, 2016 @09:34PM
(#13011171)
I don't know this particular company's methodology but, in a nutshell, usually they consider a number of glide paths and then run Monte Carlo simulations for each, then choose the best performing one. The goal is to minimize the probability of running out of money before dying, assuming the retiree withdraws a constant amount every year. Some studies concluded that a rising-equity path performs better.
Of course it's more complicated than that. There's a lot of assumptions embedded in those simulations: life expectancy, bonds and stocks returns, etc. See below for more info.
Re:True Link (YC S13) is launching an investment division
by pmiller2 on Tuesday November 22, 2016 @02:18AM
(#13012280)
That's interesting, because increasing the percentage of equities over time is literally the opposite of what most other investment advice sources preach. Thanks for the links. :)
Of course it's more complicated than that. There's a lot of assumptions embedded in those simulations: life expectancy, bonds and stocks returns, etc. See below for more info.
The Case for Increasing Stock Exposure in Retirement https://www.aier.org/research/case-increasing-stock-exposure...
Reducing Retirement Risk with a Rising Equity Glide Path https://www.onefpa.org/journal/Pages/Reducing%20Retirement%2...