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50 years after ERISA, too many members of the retirement planning community are still ignorant of the reasons & rationales behind the options for real-life retirement income planning.

Partly this is because ERISA was passed in 1974 5 years before the first 401k plan existed and 17 before (1991) H. Markowitz revealed his modern portfolio theory (MPT) didn’t address the asset/liability matching problem. Since then new groups of professionals CRC (1999) , RMA (2010) and RICP (2013) have attempted to address this. But there’s an inherent conflict of interest. If a practice is focused on clients who are spending down their assets before dying how does the business grow?

The default style therefore is to suggest clients follow a total return strategy instead of a more flexible and potential safer approach summed up as “Income is the Outcome”

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