According to MPT, following certain steps leads to the optimal portfolio for the individual’s risk and return preferences. But, like executing a perfect squat, knowing how to build the optimal portfolio is not enough.

Advisors can choose from five approaches to meet their clients’ income needs in retirement, each with its own merits and drawbacks. Those strategies attempt to solve for a central goal – ensuring that clients don’t run out of money – a risk that is illustrated by my wife’s catering business.

Visualizing your retirement savings not as dollars, but as tokens – like those used as the medium of exchange in amusement parks – will help retirees overcome the pernicious bias of myopic loss aversion. Visualizing your retirement savings not as dollars, but as tokens – like those used as the medium of exchange in amusement parks – will help retirees overcome the pernicious bias of myopic loss aversion.