About this episode

Dr. Paul Kaplan discusses life cycle finance and its implications for financial planning.

In this episode, we are joined by Dr. Paul Kaplan, economist, CFA charterholder, former Director of Research at Morningstar Canada, and co-author of Lifetime Financial Advice, for a fascinating exploration of life cycle finance. Drawing on decades of research in economics, portfolio construction, and asset allocation, Paul explains how financial planning should be grounded in optimizing lifetime consumption rather than relying on disconnected rules of thumb. We explore how life cycle finance integrates consumption, saving, investing, and retirement spending into a single framework, why risk tolerance and risk capacity are fundamentally different concepts, and how human capital should be treated as part of an investor's balance sheet. Paul also walks through the life cycle model he and Tom Idzorek developed, explains why traditional retirement rules like the 4% rule lack theoretical foundations, and demonstrates an open-source spreadsheet that allows anyone to experiment with the model for themselves. This conversation brings together economics, portfolio theory, and financial planning into a practical framework for making better lifetime financial decisions. Key Points From This…

People in this episode

Hosts: Benjamin Felix, Cameron Passmore, Dan Bortolotti

Guest: Dr. Paul Kaplan

Topics covered

• life cycle finance
• financial planning
• consumption smoothing
• risk tolerance
• portfolio theory

Keywords

• financial planning
• life cycle finance
• consumption smoothing
• risk tolerance
• portfolio construction

Mentioned in this episode

Organizations: Morningstar Canada

Books & works: Lifetime Financial Advice

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