Thinking Actuary

Asset allocation in retirement should consider lifetime income. By determining the present value of lifetime income sources like Social Security and pensions and including them in thinking about your asset allocation, you may be able to determine a more appropriate mix of assets.  The examples below come from my first place essay on financial decisions for retirement.  They can help you to benchmark your own asset allocation and consider what mix of risky assets like equity, and low risk assets like investment grade bonds, could make sense for you.  You are responsible for the results of your own investment decisions so please read the full description of this approach here, consult advisors, consider other strategies and carefully consider your own situation before making any changes to your own asset allocation or the allocation of others.  Also, check out the safe spending calculator here and the blog on safe spending here.