Increasingly, individuals in the U.S. are expected to plan and prepare for their own retirement through self-directed defined contribution (DC) plans. This is extremely complex: They must incorporate uncertainty about future asset returns and inflation, how these interact with their non-retirement assets, uncertainty over their own life expectancies and longevity risk, and all the while satisfy their income needs during retirement. Unfortunately, most financial advice and analysis regarding self-directed retirement plans focus solely on the plan's assets. As a result, they often mischaracterize both the magnitude and the fundamental nature of the risks associated with retirement planning for the typical household.

Click here to read PDF.

The Author

Niels K. Pedersen

Quantitative Research Analyst, Asset Allocation Research

Sean Klein

Client Solutions & Analytics

Disclosures

London
PIMCO Europe Ltd
11 Baker Street
London W1U 3AH, England
+44 (0) 20 3640 1000

Dublin
PIMCO Europe GmbH Irish Branch,
PIMCO Global Advisors (Ireland)
Limited
3rd Floor, Harcourt Building 57B Harcourt Street
Dublin D02 F721, Ireland
+353 (0) 1592 2000

Munich
PIMCO Europe GmbH
Seidlstraße 24-24a
80335 Munich, Germany
+49 (0) 89 26209 6000

Milan
PIMCO Europe GmbH - Italy
Corso Matteotti 8
20121 Milan, Italy
+39 02 9475 5400

Zurich
PIMCO (Schweiz) GmbH
Brandschenkestrasse 41
8002 Zurich, Switzerland
Tel: + 41 44 512 49 10

Madrid
PIMCO Europe GmbH - Spain
Paseo de la Castellana, 43
28046 Madrid, Spain
Tel: +34 810 809 912

PIMCO