RT Journal Article SR Electronic T1 Shortfall Risk and Shortfall Duration for Portfolio Choice in Decumulation JF The Journal of Retirement FD Institutional Investor Journals SP 24 OP 34 DO 10.3905/jor.2019.7.1.024 VO 7 IS 1 A1 Ganlin Xu A1 Harry Markowitz A1 John B. Guerard, , Jr. YR 2019 UL https://pm-research.com/content/7/1/24.abstract AB The article studies the portfolio selection problem in the retirement phase by using the habit formation utility function in the context of traditional utility maximization. The habit formation utility can be further simplified to a linear combination of shortfall risk and shortfall duration. A retiree who can easily adapt to a new spending level should emphasize shortfall duration whereas a retiree who is rigid in spending should emphasize shortfall risk. The article provides the conditions in which current practitioners favorite choices of shortfall risk, as a criterion to choose retirement portfolios, are consistent with utility maximization.TOPICS: Retirement, wealth management, long-term/retirement investing