When it comes to generating retirement income, investors arguably spend the most time and effort on selecting ‘good ’ investment funds/managers—the so called alpha decision—as well as the asset allocation, or beta, decision. However, alpha and beta are just two elements of a myriad of important financial planning decisions, many of which can have a far more significant impact on retirement income. We introduce a new concept called “Gamma ” designed to quantify the additional expected retirement income achieved by an individual investor from making more intelligent financial planning decisions. Gamma will vary for different types of investors, but in this article we focus on five fundamental financial planning decisions/techniques: a total wealth framework to determine the optimal asset allocation, a dynamic withdrawal strategy, incorporating guaranteed income products (i.e., annuities), tax-efficient decisions, and liability-relative asset allocation optimization. We estimate a retiree can expect to generate 29 % more income on a “utility-adjusted ” basis using a Gamma-efficient retirement income strategy when compared to our base scenario, which assumes a 4 % constant real withdrawal and a 20 % equity allocation portfolio. This additional income is equivalent to an annual arithmetic return increase of +1.82 % (i.e., Gamma equivalent alpha), which represents a significant improvement in portfolio efficiency for a retiree. Unlike traditional alpha, which can b
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