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charting retirement

Charting Retirement is a weekly snapshot of retirement-related data.

Is it best to keep the same asset mix throughout your entire saving period? Or slowly reduce your equity weighting as you approach retirement? To test this, I looked at three 28-year periods between 1938 and 2021. The 28-year time frame would apply to a saver in her mid-30s who plans to retire in her early 60s. The results weren’t even close. A TDF approach wins out over a fixed asset mix. (TDF stands for target-date fund; the asset mix starts out with 100 per cent in equities in one’s 30s and is gradually reduced to 60 per cent equities by retirement. The rest is invested in long-term government bonds.)


(Source: Calculations by the author using the Canadian Institute of Actuaries economic statistics. Investment fees of 0.5 per cent were deducted from annual returns.)

Frederick Vettese is former chief actuary of Morneau Shepell and author of Retirement Income for Life.

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