Asset Allocation for Retirement Income: A Framework for Income-Oriented Investors

13/10/2021

Rene Martel, Sean Klein

Executive Summary

Building wealth-oriented portfolios is a well-understood problem. However, building income-oriented portfolios – desired especially by retirees – comes with a complex set of trade-offs.
Fixed income funds, a staple of income-oriented strategies, tend to trade off volatility in income for volatility in wealth.
Bonds help provide an inherent hedge in equity-heavy, wealth-oriented portfolios. Meanwhile, capital gains from equities may help income-oriented investors preserve their wealth.
Our research shows how an income-oriented investor can use equity and fixed income assets to trade off the level of and risks to their near-term income, long-term income, and their wealth.

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Featured Participants

Rene Martel

Head of Retirement

Sean Klein

Head of Client Business Strategy – Client Solutions and Analytics

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