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White Paper: Income for the Retirement Years: A New Model for Seeking Stable Retirement Income

As workers begin the transition from asset accumulation to retirement, they face a wide array of complex and inter-related decisions that will affect their ability to enjoy the “golden years.”

PIMCO DC Real PathUnfortunately, these decisions – such as how to allocate assets, when to take Social Security benefits and whether to buy an annuity – often befuddle the most sophisticated minds in finance, let alone individuals with modest savings and limited financial knowledge. To help unravel the inter-relationships, we set forth a unified framework that aims to optimize decisions collectively and present potential strategies designed to seek the most stable and consistent income stream possible for a given retiree’s wealth and Social Security income. Based on our model, we conclude that the mix of stocks and bonds one should hold at retirement depends significantly on their level of wealth and that the decision to annuitize is relatively consistent across the wealth spectrum.

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