Life-cycle investing deals with consumption smoothing which basically involves spreading financial capital (accumulated assets) and human capital (the earnings during one's working years) over an entire lifetime--including retirement. Life-cycle investing deals with the challenge of combining elements of saving, diversification, hedging and insuring so that there is an optimal level of consumption and standard of living throughout one's entire lifetime. Human capital and most importantly the relationship between human and financial capital are fundamental aspects of life-cycle investing. The notion that consumers care more about lifetime consumption than wealth or portfolio value is also a key tenet of life-cycle theory.
