The conventional knowledge that it is nearly always preferable for people to start saving and investing for retirement as early as feasible is now being called into question by recent research from the Journal of Portfolio Management.
According to the new analysis, retirement strategy is frequently based on the idea that earlier saving is always preferable, primarily because of the power of compounding. However, this assumption is frequently not measured against a useful standard, reported ThinkAdvisor.
The authors contend that a lifecycle model, in which rational people distribute resources across their lifespan with the goal of preventing significant fluctuations in their standard of living, would serve as a reasonable benchmark.
