In the News


Opposing Retirement Philosophies: Probability-Based vs Safety-First

Document Type


Publication Date



The ongoing decline of defined benefit plans and pensions, and the associated rise of defined contribution plans – in the US and around the globe – is leading to a growing body of research around how best to “de-cumulate” a lump sum of assets after they have been accumulated in the first place.

To address the challenge, a wide range of strategies have emerged, some built around a “safety-first” framework of guaranteeing a base of income (e.g., with annuitization or a pension) and building on top of that, while others have focused on a more “probability-based” portfolio-centric approach that aims to spend down the invested assets while maximizing the probability of success along the way.