The Floor-Leverage Rule for Retirement

Jason Scott and John Watson ()
Additional contact information
Jason Scott: Financial Engines, Inc.
John Watson: Stanford Graduate School of Business

No 13-013, Discussion Papers from Stanford Institute for Economic Policy Research

Abstract: The Floor-Leverage Rule is a spending and investment strategy designed for retirees that can tolerate investment risk, but insist on sustainable spending. The rule calls for purchasing a spending guarantee with 85% of wealth and investing the remaining 15% in equities with 3x leverage. Surprisingly, this leverage is a tool for managing risk. We compare our rule to some popular strategies, illustrate it for a variety of retiree preferences, and evaluate its historical performance.

Date: 2013-12
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
http://www-siepr.stanford.edu/repec/sip/13-013.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 500 Can't connect to www-siepr.stanford.edu:80 (No such host is known. )

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:sip:dpaper:13-013

Access Statistics for this paper

More papers in Discussion Papers from Stanford Institute for Economic Policy Research Contact information at EDIRC.
Bibliographic data for series maintained by Anne Shor ( this e-mail address is bad, please contact ).