Dynamic DC : Keeping Your Options Open

Retirees face a tradeoff between two goals, payment certainty and liquidity. Annuities address the former at a cost of the latter. This article lays out an investment approach that aspires to achieve both goals. The heart of this approach is a dynamic investment strategy aimed at sustaining a steady income stream while also minimizing the risk of running out of money. The result is a defined-benefit-like outcome in a defined contribution pension-plan structure (i.e., you won't be eating cat food in retirement).

READ THE FULL PAPER

TD3.0 : What DC Plan Members Really Want

PRESS RELEASE : PENSON BREAKTHROUGH FOR THE REST OF US!

Target date or lifecycle funds are popular because they simplify decision making, but are blunt instruments in dealing with market risk and personal goals. We reengineer age based lifecycle funds making them more responsive to individual goals and to market conditions by structuring a dynamic risk based glide path that targets replacement income. We conclude that adjusting portfolio risk based upon progress towards a goal improves the likelihood of achieving a target income with lower expected risk than current lifecycle funds and other popular strategies.

READ THE SYNOPSIS || READ THE FULL PAPER