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Exploring the Optimal Equity Allocation Path for Retirees

David Blanchett, American Association of Individual Investors

Abstract

Until recently, a portfolio allocation that evolved over time (meaning followed a “glide path”) to become more conservative after retirement was the widely accepted standard approach.

However, recent studies by Michael Kitces and Wade Pfau and Luke Delorme suggest the opposite: that retirees should increase their equity allocations over time.