Faculty Advisor

Abraham, Jon P.

Faculty Advisor

Posterro, Barry John

Abstract

The accumulation phase of retirement planning is when an individual accrues assets that would fund their retirement. The decumulation phase begins when they retire. Our work is based on parts of Clare, Seaton, Smith, and Thomas’s paper on sequence risk. Sequence risk is the uncertainty created by the order of a specific set of returns. We simulated portfolios’ accumulation and decumulation phases to illustrate how different sequences of the same set of returns result in different portfolio values. By creating 100,000 permutations for each phase, we analyzed each scenario’s ending values for accumulation and annual withdrawal rates for decumulation.

Publisher

Worcester Polytechnic Institute

Date Accepted

April 2019

Major

Actuarial Mathematics

Project Type

Major Qualifying Project

Accessibility

Unrestricted

Advisor Department

Mathematical Sciences

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