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Resolve's Gestalt University

Sep 7, 2021

As a growing percentage of Baby Boomers prepare for retirement, they are confronted with the uncomfortable prospect of record stock and bond valuations. Even the most optimistic capital market assumptions suggest the 60/40 portfolio is unlikely to deliver the returns many nest eggs have been built for.

To help us get a clearer picture of the challenges and opportunities faced by retirees in the coming decade, we had the pleasure of speaking with Michael Finke (Professor of Wealth Management) and David Blanchett (Managing Director and Head of Retirement Research at QMA). Topics included:

  • The crucial importance of updated and realistic capital market assumptions
  • Lifespan, “healthspan” and the prospects of retirements that last well over 30 years
  • Why ‘probability of success’ is no longer an adequate yardstick for retirement planning
  • How to prepare if we are indeed stuck in a perpetually low interest rate environment
  • The fundamental dynamics of sequence of returns
  • Guaranteed incomes, utility and nuance – true outcome vs probability of failure
  • The difference between a TIPS ladder and an annuity
  • Longevity annuities and optimal spending rates
  • Purpose Investment’s Longevity Pension Fund – combining a tontine, an annuity and a balanced portfolio
  • Analyzing other tailored products

We also discussed how any tool, no matter how sophisticated, is still bound to the ‘GIGO (Garbage In, Garbage Out) problem’, why these problems are not limited to retail investors, a highly effective cake analogy to describe solutions to longevity risk, and much more.

Thank you for watching and listening. See you next week.

This is “ReSolve’s Riffs” – live on YouTube every Friday afternoon to debate the most relevant investment topics of the day, hosted by Adam Butler, Mike Philbrick and Rodrigo Gordillo of ReSolve Global* and Richard Laterman of ReSolve Asset Management.


*ReSolve Global refers to ReSolve Asset Management SEZC (Cayman) which is registered with the Commodity Futures Trading Commission as a commodity trading advisor and commodity pool operator. This registration is administered through the National Futures Association (“NFA”). Further, ReSolve Global is a registered person with the Cayman Islands Monetary Authority.