The Rational Reminder Podcast · Thursday, July 9, 2026
Dr. Paul Kaplan defines life cycle finance as the economic branch focused on optimizing an individual's consumption, savings, and investment decisions throughout their entire life. He emphasizes the goal of smoothing consumption between working years and retirement, avoiding significant jumps in spending levels.
“Well, life cycle finance is the branch of economics that deals with how individuals over the course of their entire lives should be making rational decisions regarding how much they consume year in and year out, how they save, how they invest, how they spend down their wealth, and how they should be smoothing their consumption over time so that when they go from their working years into their retirement years, there shouldn't be a big jump in their level of consumption, that it should be a smooth transition.”