August 2017

06Aug

The Role of Self-Control on Retirement Preparedness of US Households

By Kyoung Tae Kim (University of Alabama), Jae Min Lee (Minnesota State University) & Eunice O. Hong (Sungshin Women's University) We examine the self-control problems of U.S households and their effects on households’ retirement preparedness based on the Behavioral Life-Cycle Hypothesis. Using the 2010 Survey of Consumer Finances dataset, the level of retirement adequacy was estimated with income replacement ratio (IRR), and only 42% of households were adequately prepared for retirement. Results from logistic regression analysis indicated that households with...

August 6, 2017
Aging, Articles, Pension design, Savings, Slider-Left,
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July 2017

23Jul

Life-Cycle Earnings Curves and Safe Savings Rates

By Derek Tharp (Kansas State University) & Michael E. Kitces (The Kitces Report & Nerd's Eye View) Traditional analyses of recommended savings ratios and safe savings rates (SSRs) typically assume constant real earnings growth throughout the one’s career. However, data on the life-cycle earnings patterns of millions of U.S. workers suggests that earnings growth does not occur at a constant rate that matches inflation. Instead, earnings tend to increase at a decreasing rate during the early years of one’s career...

July 23, 2017
Aging, Articles, Labor Market, Savings,
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23Jul

Retirement Security in an Aging Society

By James M. Poterba The share of the U.S. population over the age of 65 was 8.1 percent in 1950, 12.4 percent in 2000, and is projected to reach 20.9 percent by 2050. The percent over 85 is projected to more than double from current levels, reaching 4.2 percent by mid-century. The aging of the U.S. population makes issues of retirement security increasingly important. Elderly individuals exhibit wide disparities in their sources of income. For those in the bottom half of...

July 23, 2017
Aging, Articles, Investing, Savings, , ,
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02Jul

Problems and demographic policies in Europe. The Role of Cities

By Gérard-François Dumont (University of Paris 4 Sorbonne) Demographic changes are often unknown because they are part of long-term logics; Yet the future of European societies is in the civil states of its various countries. In the first part, we must first analyze the general demographic changes, in particular with regard to the natural increase in Europe, and then the changes in the geography of the population linked to changes in urbanization. Knowledge of the facts will then allow us...

July 2, 2017
Aging, Articles, Labor Market,
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June 2017

25Jun

The Causal Effect of Retirement on Health Services Utilization: Evidence from Urban Vietnam

By Thang Dang (University of Economics Ho Chi Minh City) Access to medical services is significantly essential for retaining and improving health status for aging population. Whilst retired individuals tend to have more time for the use of health services, there is only inadequate evidence evaluating the causal effect of retirement on health services utilization. To fulfill this gap in the literature especially from developing countries, this paper estimates the causal effect of retirement on the probability and the frequency...

June 25, 2017
Aging, Articles, Labor Market
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18Jun

What Rates of Productivity Growth Would Be Required to Offset the Effects of Population Aging? A Study of Twenty Industrialised Countries

By Frank T. Denton & Byron G. Spencer (McMaster University) A shift in population distribution toward older ages is underway in industrialised countries throughout the world and will continue well into the future. We provide a framework for isolating the pure effects of population aging on per capita GDP, employ the framework in calculations for twenty OECD countries, and derive the rates of productivity growth required to offset those effects. We consider also some labour-related changes that might provide offsets,...

June 18, 2017
Aging, Articles, Labor Market, Regulation, ,
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11Jun

We’ll Live to 100 – How Can We Afford It?

The challenges we face to provide our ageing societies with a financially secure retirement are well-known. In most countries around the world, standards of living and healthcare advancements are allowing people to live longer. This should be celebrated, but we should also consider the implications for the financial systems that have been designed to meet our retirement needs, which in many countries are already under severe strain. This report has been produced as part of the Forum’s Retirement Investment Systems...

June 11, 2017
Aging, Articles, Labor Market, Pension design, , ,
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04Jun

Modeling Multi-State Health Transitions in China: A Generalized Linear Model with Time Trends

By Katja Hanewald, Han Li & Adam Wenqiang Shao (University of New South Wales) Rapid population aging in China has urged the need to understand health transitions of older Chinese to assist the development of social security programs and financial products aimed at funding long-term care. In this paper, we develop a new flexible approach to modeling health transitions in a multi-state Markov model that allows for age effects, time trends and age-time interactions. The model is implemented in the...

June 4, 2017
Aging, Articles, Labor Market
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04Jun

Long-Run Biological Interest Rate for Pay-as-You-Go Pensions in Advanced and Developing Countries

By Masahiro Nozaki (International Monetary Fund) How much of an internal rate of return would a sustainable pay-as-you-go pension system offer current and future generations equally? The answer is the sum of the Long-Run Biological Interest Rates (LBIR), the real-world equivalent of Samuelson's (1958) biological interest rate, and future productivity growth. Reflecting global population ageing, the median LBIR across 172 countries is as low as 1 percent per year. The LBIRs are particularly low in advanced countries, estimated to be...

June 4, 2017
Aging, Articles, Labor Market, Pension design, ,
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04Jun

Annuities and Retirement Income Planning

By Patrick J. Collins (Schultz Collins) This CFA Institute Research Foundation brief provides a broad-brush survey of the US annuity marketplace as of the end of 2014. It is a short and generic introduction to currently available annuity contracts. It is oriented toward both investors who are contemplating the use of annuities to generate income and hedge longevity risk and their advisers. It does not discuss the literature that evaluates annuities as instruments to enhance utility in the context of...

June 4, 2017
Aging, Articles, Investing,
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