Customize Consent Preferences

We use cookies to help you navigate efficiently and perform certain functions. You will find detailed information about all cookies under each consent category below.

The cookies that are categorized as "Necessary" are stored on your browser as they are essential for enabling the basic functionalities of the site. ... 

Always Active

Necessary cookies are required to enable the basic features of this site, such as providing secure log-in or adjusting your consent preferences. These cookies do not store any personally identifiable data.

No cookies to display.

Functional cookies help perform certain functionalities like sharing the content of the website on social media platforms, collecting feedback, and other third-party features.

No cookies to display.

Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics such as the number of visitors, bounce rate, traffic source, etc.

No cookies to display.

Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.

No cookies to display.

Advertisement cookies are used to provide visitors with customized advertisements based on the pages you visited previously and to analyze the effectiveness of the ad campaigns.

No cookies to display.

July 2019

Selecting a Social Security Age to Balance Consumption and Risk

By Barry Cobb, Jeffrey Smith This paper uses Monte Carlo simulation to determine the maximum consumption given retirement at age 62, initial wealth, risk tolerance, and Social Security take decision. Coile et al. (2002) argue for a delay, because the payment increases 7% for each year. Focusing on maximizing the expected present value of benefits may be misguided. This paper shows that, conditional on retirement at age 62, initial consumption is always maximized by taking Social Security no later...

Navigating Complex Financial Decisions at Retirement: Evidence from Annuity Choices in Public Sector Pensions

By Robert L. Clark, Robert G. Hammond, David Vanderweide Choices regarding the disposition of wealth at retirement can have substantial implications for retirement income security. We analyze the factors determining annuity option choices offered by a public sector defined pension plan with no default annuity option. Using combined administrative records and survey data, we explore the role of individual and household characteristics as well as risk preferences, time preferences, and financial literacy. The evidence is consistent with predictions over which...

The Future of Finance is Now: The Most Important Trends in Finance for the Coming Decade Have Already Started

By Jason Schenker The Future of Finance is Already HereIndustries are being disrupted by new and emerging technologies. The coming decade will bring an acceleration of technological innovation, adoption, and disruption. But finance has long been an industry at the forefront of technology adoption, which is why some of the most critical technological innovations and solutions for finance have already emerged. The Future of Finance is Now explores the most important innovations in finance technology (FinTech) as...

June 2019

Annuity Pricing in Public Pension Plans: Importance of Interest Rates

By Nino Abashidze, Robert L. Clark, Beth Ritter, David Vanderweide There is little systematic information on the distribution options in public sector retirement plans and how annuity options are priced relative to the standard single life annuity. This study examines the distribution options of 85 large public retirement plans covering general state employees, teachers, and local government employees. An important component of the analysis is the construction of a data set presenting the annuity options offered by each of...

How Will Retirement Saving Change By 2050? Prospects for the Millennial Generation

By William G. Gale, Hilary Gelfond, Jason J. Fichtner We consider prospects for retirement saving for members of the millennial generation, who will be between ages 54 and 69 in 2050. Adequacy of retirement saving preparation among current and near-retirees is marked by significant heterogeneity, a characteristic that will likely hold for Millennials as well. In preparing for retirement, Millennials will have several advantages relative to previous generations, such as more education, longer working lives, and more flexible work arrangements,...

May 2019

Ensuring Retirement Security with Simple GLIDeS

By Adam Kobor, Arun Muralidhar There is a growing retirement crisis and most of the focus has been on the fact that individuals are not saving enough for retirement, may not have access to pension schemes, or are financially illiterate. More critically, assets/financial products available to investors, may not be appropriate for the typical individual saving for retirement. The goal of retirement is to try to guarantee a target level of income ideally from retirement till death. Current glide...

Borrowing to Save? The Impact of Automatic Enrollment on Debt

By John Beshears, James J. Choi, David Laibson, Brigitte C. Madrian, Bill Skimmyhorn Does automatic enrollment into retirement savings plans increase borrowing outside the plan? We study this question using a natural experiment created when the U.S. Army began automatically enrolling its newly hired civilian employees into the Thrift Savings Plan (TSP) at a default contribution rate of 3% of income. We find that four years after hire, automatic enrollment causes no significant change in debt excluding auto loans...

Retirement and Social Security

By Giam Cipriani, Tamara Fioroni In this paper, we analyse the effects of demographic change on a PAYG pension system, financed with a defined contribution scheme. In particular we examine the relationship between retirement, fertility and pensions in a three-period overlapping generations model. We focus on both the case of mandatory retirement and the case where the retirement age is freely chosen. In the case of mandatory retirement, increasing longevity has an unambiguously negative impact on fertility and pension...

How Financial Literacy Impacts Retirement Savings: The Role of Present Bias and Exponential Growth Bias

By Kanin Anantanasuwong Lack of saving for retirement is a major issue, especially in soon-to-be ageing societies. In this paper we examine the impact of financial literacy on retirement savings, as well as its effect on present bias and exponential growth bias, which have been identified as detrimental to savings in previous studies. We find that better financial literacy is related with a more accurate perception of exponential growth, which stimulates retirement savings. In addition, financially literate individuals are...

Financial Literacy and Saving for Retirement among Kenyan Households

By Teresa Schützeichel In this paper I examine financial literacy and saving for retirement in Kenya using the household survey of 2016 from FinAccess Kenya. I use probit regressions to determine the effect financial literacy has on individuals saving regularly as well as saving for retirement. My findings show that households with higher levels of financial literacy will tend to have a higher likelihood to save on a regular basis and subsequently save for retirement. I find that women, the...