Should Glidepaths Be Gender-Specific?

Abstract

Predetermined glidepaths are useful tools for asset allocation and for limiting behavioral biases, but do not account for all the characteristics of an investor, leading to highly varied failure rates between men and women. Our bootstrapping analysis indicates that income levels and earnings patterns, along with life expectancy, have the largest contributions to the differences in failure rates with other issues, such as Social Security, having more modest impacts. The results also suggest that aggressive allocations on the part of men may be a rational attempt to achieve retirement failure rates comparable to women.