How old do you feel? Academics at Maastricht argue that not only our true age but also our subjective age should be integrated into designing and marketing financial products and services like target date funds and pension products.
Instead of switching around holdings to generate yield, which can in turn introduce more risk, a total-return investing approach can automatically rebalance portfolio assets while supplementing income for retirees.
If returns revert to the mean, retirees taking outsized pension payments will face some tough decisions, Jonathan Philpot says. If the market takes a significant, sustained dive the government may once again reduce minimum payments.