Key Findings Details
Money in Motion: Dynamic Portfolio Choice in Retirement
Wolfram J. Horneff, Raimond H. Maurer, Olivia S. Mitchell and Michael Z. Stamos
- Retirees must manage money in retirement so as to not outlive their funds while continuing to invest. We find that a hypothetical retiree will not fully annutize.
- Her optimal stock allocation amounts initially to more than half of her financial wealth and declines with age.
- In practice, it turns out that many retirees will do almost as well by purchasing a variable annuity invested 60/40 in stocks/bonds.