Introducing “Flexicure” Goal-Based Investing Retirement Solutions

Summary:

Individuals need “flexicurity” in retirement solutions, and should not have to choose between security and flexibility. In this context, we propose to apply the principles of goal-based investing to the design of a new generation of retirement goal-based investing strategies, which can be regarded as risk-controlled target date funds that strike a balance between security and performance with respect to the objective of generating replacement income. These simple retirement goal-based investing strategies can be used to help individuals and households secure minimum levels of replacement income while generating upside exposure in the context of liquid and reversible investment products. Recent advances in financial engineering and digital technologies make it possible to apply goal-based investing principles to a much broader population of investors than the few traditional clients who can afford customized mandates or private banking service.