Then, after 1981, retirement savings began to pour into the market and companies were driven to inflate their stocks instead of paying dividends. As a result, returns from appreciation were five times greater than from dividends. If anything, those reports are a warning of what to expect in the back half. But someone who builds a nest egg of shares that will have to be sold must decide how long to stretch the sales. I call that the Impossible Decision, because it requires predicting how long one expects to live.
Actuaries routinely make life expectancy projections for large groups of people.
Overestimating can lead to a lower standard of living than is necessary, while underestimating can lead to spending one's last years in poverty. Having helped several older friends and family members manage their affairs, I know that security is often their primary concern. I also know that it is harder for many people to make smart, balanced decisions that involve many details at 80 than it was at 40. It is absurd to expect millions of older people to manage the sales of their stocks as market prices keep changing. Individually managed accounts will put additional pressure on them when they retire and can turn their later years into a nightmare.