Skip to main content

Main menu

  • Home
  • Current Issue
  • Past Issues
  • Videos
  • Submit an article
  • More
    • About JOR
    • Editorial Board
    • Published Ahead of Print (PAP)
  • IPR Logo
  • About Us
  • Journals
  • Publish
  • Advertise
  • Videos
  • Webinars
  • More
    • Awards
    • Article Licensing
    • Academic Use
  • Follow IIJ on LinkedIn
  • Follow IIJ on Twitter

User menu

  • Sample our Content
  • Request a Demo
  • Log in

Search

  • ADVANCED SEARCH: Discover more content by journal, author or time frame
The Journal of Retirement
  • IPR Logo
  • About Us
  • Journals
  • Publish
  • Advertise
  • Videos
  • Webinars
  • More
    • Awards
    • Article Licensing
    • Academic Use
  • Sample our Content
  • Request a Demo
  • Log in
The Journal of Retirement

The Journal of Retirement

ADVANCED SEARCH: Discover more content by journal, author or time frame

  • Home
  • Current Issue
  • Past Issues
  • Videos
  • Submit an article
  • More
    • About JOR
    • Editorial Board
    • Published Ahead of Print (PAP)
  • Follow IIJ on LinkedIn
  • Follow IIJ on Twitter
Article

Mean-Variance Analysis in Post-Retirement Planning

Ganlin Xu and Thomas Anichini
The Journal of Retirement Winter 2016, 3 (3) 62-76; DOI: https://doi.org/10.3905/jor.2016.3.3.062
Ganlin Xu
is CTO of , Inc., in San Diego, CA.
  • Find this author on Google Scholar
  • Find this author on PubMed
  • Search for this author on this site
  • For correspondence: gxu1@guidedchoice.com
Thomas Anichini
is vice president and senior investment strategist of , Inc., in San Diego, CA.
  • Find this author on Google Scholar
  • Find this author on PubMed
  • Search for this author on this site
  • For correspondence: tanichini@guidedchoice.com
  • Article
  • Info & Metrics
  • PDF (Subscribers Only)
Loading

Click to login and read the full article.

Don’t have access? Click here to request a demo 

Alternatively, Call a member of the team to discuss membership options
US and Overseas: +1 646-931-9045
UK: 0207 139 1600

Abstract

In this study we analyze the variability and average level ofspending in retirement under two strategies: the popular “4% rule” and what we will term the self-funded variableannuity strategy (SVA strategy). The 4% rule stipulates thateach year a retiree should spend 4% of her initial wealthat retirement; the value of spending grows with the rateof inflation. Under the SVA strategy, each year the retireedetermines her spending level as equivalent to the incomeshe could theoretically obtain by purchasing an annuity(but without actually purchasing one). The 4% rule entailslower average spending and little variability, while theSVA strategy entails higher average spending and highervariability.

The SVA strategy is based on a theoretical foundationof expected utility maximization. We demonstrate howa retiree can make an informed decision about allocatingamong stocks, bonds, and annuities, and whether to combinethe 4% spending rule with the SVA strategy to achievehigher average spending. In particular, if future returns turnout to be lower than historical returns, as many experts predict,combining the 4% rule and SVA strategy may achievespending of more than 4% of initial wealth on average whilereducing the failure rate to less than 10%. We also considerhow mortality might affect a mixed strategy that combinesa purchased annuity with the SVA strategy.

  • © 2016 Pageant Media Ltd
View Full Text

Don’t have access? Click here to request a demo

Alternatively, Call a member of the team to discuss membership options

US and Overseas: +1 646-931-9045

UK: 0207 139 1600

Log in using your username and password

Forgot your user name or password?
PreviousNext
Back to top

Explore our content to discover more relevant research

  • By topic
  • Across journals
  • From the experts
  • Monthly highlights
  • Special collections

In this issue

The Journal of Retirement: 3 (3)
The Journal of Retirement
Vol. 3, Issue 3
Winter 2016
  • Table of Contents
  • Index by author
Print
Download PDF
Article Alerts
Sign In to Email Alerts with your Email Address
Email Article

Thank you for your interest in spreading the word on The Journal of Retirement.

NOTE: We only request your email address so that the person you are recommending the page to knows that you wanted them to see it, and that it is not junk mail. We do not capture any email address.

Enter multiple addresses on separate lines or separate them with commas.
Mean-Variance Analysis in Post-Retirement Planning
(Your Name) has sent you a message from The Journal of Retirement
(Your Name) thought you would like to see the The Journal of Retirement web site.
CAPTCHA
This question is for testing whether or not you are a human visitor and to prevent automated spam submissions.
Citation Tools
Mean-Variance Analysis in Post-Retirement Planning
Ganlin Xu, Thomas Anichini
The Journal of Retirement Jan 2016, 3 (3) 62-76; DOI: 10.3905/jor.2016.3.3.062

Citation Manager Formats

  • BibTeX
  • Bookends
  • EasyBib
  • EndNote (tagged)
  • EndNote 8 (xml)
  • Medlars
  • Mendeley
  • Papers
  • RefWorks Tagged
  • Ref Manager
  • RIS
  • Zotero
Save To My Folders
Share
Mean-Variance Analysis in Post-Retirement Planning
Ganlin Xu, Thomas Anichini
The Journal of Retirement Jan 2016, 3 (3) 62-76; DOI: 10.3905/jor.2016.3.3.062
del.icio.us logo Digg logo Reddit logo Twitter logo CiteULike logo Facebook logo Google logo LinkedIn logo Mendeley logo
Tweet Widget Facebook Like LinkedIn logo

Jump to section

  • Article
    • Abstract
    • SPENDING POLICY WITH FIXED PLANNING PERIOD
    • AVERAGE SPENDING-VARIABILITY TRADE-OFF WITH FIXED PLANNING PERIOD
    • AVERAGE SPENDING-VARIABILITY TRADE-OFF WITH RANDOM MORTALITY
    • SOCIAL SECURITY AS A REAL-LIFE ANNUITY
    • CONCLUSION
    • APPENDIX A
    • APPENDIX B
    • APPENDIX C
    • ENDNOTES
    • REFERENCES
  • Info & Metrics
  • PDF (Subscribers Only)
  • PDF (Subscribers Only)

Similar Articles

Cited By...

  • Static and Dynamic Tax Diversification of Withdrawals from Multiple Individual Retirement Accounts
  • Google Scholar

More in this TOC Section

  • Editor’s Letter
  • BOOK REVIEW: Is There a Retirement Crisis? An Exploration of the Current Debate
  • Editor’s Letter
Show more Article
LONDON
One London Wall, London, EC2Y 5EA
United Kingdom
+44 207 139 1600
 
NEW YORK
41 Madison Avenue, New York, NY 10010
USA
+1 646 931 9045
pm-research@pageantmedia.com
 

Stay Connected

  • Follow IIJ on LinkedIn
  • Follow IIJ on Twitter

MORE FROM PMR

  • Home
  • Awards
  • Investment Guides
  • Videos
  • About PMR

INFORMATION FOR

  • Academics
  • Agents
  • Authors
  • Content Usage Terms

GET INVOLVED

  • Advertise
  • Publish
  • Article Licensing
  • Contact Us
  • Subscribe Now
  • Log In
  • Update your profile
  • Give us your feedback

© 2021 Pageant Media Ltd | All Rights Reserved | ISSN: 2326-6899 | E-ISSN: 2326-6902

  • Site Map
  • Terms & Conditions
  • Cookies
  • Privacy Policy