Retirees need to make two critical financial decisions, namely, the withdrawal rate and the asset allocation of their portfolios. We propose a methodology that retirees, and particularly advisors, could use to make these decisions in an optimal way. We introduce a new variable, the coverage...

The most important financial issue retirees have to deal with is whether their strategy will be able to sustain all the withdrawals they expect to make in retirement, as well as a bequest they aim to leave. For this reason, it is critical to periodically monitor the evolution of a financial plan...