Waring and Siegel Win Prestigious Graham and Dodd Award for Spending Rule Article
One of CFA Institute's Highest HonorsTo read the award-winning article, click here, or locate it in the Publications section of this website.
From the CFA Institute's press release (for full text, click here):
CFA Institute Names Top Financial Analysts Journal Articles with Annual Graham and Dodd Awards
Best article of 2015 contributes to addressing the retirement crisis by proposing a dynamic spending rule that prevents retirees from running out of money by making their income during retirement fluctuate with asset values. It is a simplification of the multi-period stochastic dynamic programming "lifestyle" models, but with very high fidelity.
New York, 8 March 2016:CFA Institute, the global association of investment management professionals, announces the results of the 2015 Graham and Dodd Awards, a program honoring the top articles published in the Financial Analysts Journal each year. “The Only Spending Rule Article You Will Ever Need” by M. Barton Waring and Laurence B. Siegel received the top award. The article appeared in the January/February 2015 issue, a special issue on retirement security that marked the 70th anniversary of the Journal. The article’s contribution is to use the annuity technique to determine the maximum income that retirees can withdraw each year without facing the risk of running out of money. The authors call their proposed spending rule an annually recalculated virtual annuity (ARVA). They explain and illustrate the mechanics of the ARVA, which allows retirees to recalculate each year how much they can spend based on their life expectancy and the current value of their retirement portfolio.
Barbara S. Petitt, CFA, managing editor of the Financial Analysts Journal, commented: “I am pleased that the Journal’s Advisory Council and Editorial Board chose to honor an article that plays a role in addressing the retirement crisis. Retirement security is one of the themes of the CFA Institute Future of Finance initiative, and the Financial Analysts Journal is well positioned not only to advance the knowledge and understanding of the challenges of achieving retirement security but also to offer practical solutions to these challenges. This article, which is written in language accessible to investors, should thus be valuable to them and their advisers.”
See Barton's earlier post describing the article in more detail.