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Bridge over ocean
1 March 2011 Financial Analysts Journal Volume 67, Issue 2

Spending Retirement on Planet Vulcan: The Impact of Longevity Risk Aversion on Optimal Withdrawal Rates (corrected July 2011)

  1. Moshe A. Milevsky
  2. Huaxiong Huang

Recommendations from the media and financial planners regarding retirement
spending rates deviate considerably from utility maximization models. This study
argues that wealth managers should advocate dynamic spending in proportion to
survival probabilities, adjusted up for exogenous pension income and down for
longevity risk aversion.

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