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Pensionize Your Nest Egg: How to Use Product Allocation to Create a Guaranteed Income for Life, 2nd Edition by Moshe A. Milevsky, Alexandra C. Macqueen

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19 Step 7: Use Product Allocation to Pensionize the Right Fraction of Your Nest Egg

The very last step is to actually pensionize the right fraction of your nest egg by allocating your resources across the three available product silos.

Working through this step—the final step in our seven-step process to pensionize your own nest egg (see Exhibit 19.1)—requires you to bring together much of the thinking we’ve done so far, including determining your desired expected financial legacy (EFL). Now, there are many factors that will affect how you actually put product allocation into place and many choices and decisions you will need to make.

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Exhibit 19.1 The Seven Steps to Pensionize Your Nest Egg: Step 7

We’ll consider one case study example in detail so you can see how product allocation might work in practice. Along the way, you’ll learn how to use the tool on the pensionizeyournestegg.com website to estimate your own Retirement Sustainability Quotient (RSQ) and the EFL of your personal retirement income plans. Keep in mind that this case study is intended simply to illustrate some concepts—any real-life situation will be much more complex than this example.

Case Study: Jack and Jill Go Up the Hill (to Fetch a Retirement Income Plan)

Let’s take the case of Jack, age 69, and Jill, age 67. They are retired, but don’t really have a retirement income plan. They have recently learned ...

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