bodhisattva

The lifestyle protection strategy:
- usually allocates amounts to equity and debt in order to minimize shortfall risk
- allows for more upside potential than the fixed planning horizon method.
- e.g., it it is important for you to retain the possibility of buying a beach house in LA upon retirement, you would be better off utilizing the lifestyle protection strategy


The fixed planning horizon strategy:
- dedicates an amount to zero coupon bonds that when mature will fund the minimum objective.
- less likely to fund the more expensive objective (such as the beach house)
- not useful when facing an uncertain time horizon