Retirement Risk, Rising Equity Glidepaths, and Valuation-Based Asset Allocation
This research investigates two types of dynamic asset allocation strategies, predetermined equity glide paths and valuation-based asset allocation, for retirees using U.S. historical data. Based on U.S. historical data, it is difficult to beat a strategy that maintains a consistently high allocation to stocks to the extent that a retiree’s risk tolerance allows for this, and subject to the caveat that high stock allocations cannot always be expected to do as well in the future.
Pfau, Wade D. PhD and Kitces, Michael E., "Retirement Risk, Rising Equity Glidepaths, and Valuation-Based Asset Allocation" (2015). Faculty Publications. 551.