nedsaid wrote:My take on all of this is that volatility cannot be avoided.
... except with annuities (SPIAs). The price you pay is loss of principle -- aka legacy.
That price may or may not be a good deal for any particular investor. If the expected volatility leaves you with enough return even at a worst case assumptions then the annuity is probably not ideal. But there degrees of "ideal." Perhaps annuitizing some percentage of your wealth is the optimal solution. I think that Wade Pfau's studies are giving us that kind of answer, or at least a point of view where one can come up with a personal answer.
This also ties into the idea of a safe floor. We can accept different amounts of volatility at different levels of need. You make "safe" what you "need." It is up to you to define "safe" and "need" to your own personal satisfaction. At least there is a framework for your planning.
May neither drought nor rain nor blizzard | disturb the joy juice in your gizzard. | And may you camp where wind won't hit you, | Where snakes won't bite and bears won't git you. | -- Squire Omar Baker