Is your retirement plan deeply flawed?

In this episode, Jeremy Keil speaks with David Blanchett, PhD, CFA, CFP®, Managing Director, Portfolio Manager, and Head of Retirement Research for PGIM DC Solutions, about the shortcomings of modern financial planning. They critique the application of modern portfolio theory and mean-variance optimization, emphasizing the gap between theory and practical outcomes in portfolio management. David advocates for a more personalized retirement planning approach, considering the unique needs of retirees.

They discuss the misunderstood role of annuities, the limitations of current financial planning tools, and the necessity for dynamic adjustments based on market performance. They also cover the importance of evolving Monte Carlo models and the need for individualized longevity expectations in planning for retirement.

Jeremy and David go over:

→ The limitations of modern portfolio theory and mean-variance optimization
→ When it’s appropriate to use annuities in retirement planning
→ David’s list of flaws in financial planning and how the process can be improved
→ What’s wrong with Monte Carlo planning
→ The need for a more nuanced approach to retirement planning
→ And more

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