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Adaptive retirement planning, sustainable withdrawals and deferred annuities

Chen, A., Haberman, S. ORCID: 0000-0003-2269-9759 & Thomas, S. (2022). Adaptive retirement planning, sustainable withdrawals and deferred annuities. Journal of Retirement, 10(3), pp. 96-119. doi: 10.3905/jor.2022.1.118


In this paper, we integrate investment decisions in the post-retirement period with the inclusion of a deferred annuity to provide a lifetime decumulation solution. We use the Perfect Withdrawal Rate (PWR) as a tool to make recommendations on withdrawal rates and asset allocations. We illustrate how cheap it is to use a deferred annuity to deal with longevity risk. Moreover, if an individual wants to maximise median PWR, he/she should allocate almost 100% in stocks. If an individual wants to maximise minimum PWR, he/she should allocate 40% - 60% in stocks; therefore, a substantial stocks component should be maintained throughout the retirement period as a new ‘normal’ asset allocation.

Publication Type: Article
Publisher Keywords: Deferred annuities; Perfect Withdrawal Rates; Decumulation strategies; Post-retirement asset allocation.
Subjects: H Social Sciences > HD Industries. Land use. Labor
H Social Sciences > HN Social history and conditions. Social problems. Social reform
Departments: Bayes Business School > Actuarial Science & Insurance
SWORD Depositor:
[thumbnail of Adaptive ret planning sus withdrawals and DA - 15th July - JoR review - v5.pdf] Text - Accepted Version
This document is not freely accessible due to copyright restrictions.


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