September 2023
22Sep

Eggs and Baskets: Lifecycle Portfolio Dynamics

By Loretti Dobrescu, Akshay Shanker, Hazel Bateman, Ben Rhodri Newell & Susan Thorp  Housing and pension wealth are two major contributors to the quality of old-age provision. Here we study the interplay between these two asset classes using the impact of changes in saving incentives on wealth accumulation across the lifetime. To do so, we build and estimate a dynamic lifecycle model of saving and portfolio choice featuring risky earnings, lumpy housing with collateralized borrowing, and financial assets inside and...

September 22, 2023
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19Sep

Brits calling for state pensions to be raised to £416 a week for every person over 60

Brits are calling for state pensions to be raised to £416 a week in line with the National Minimum Wage after previous efforts failed. A new petition has been set up calling on ministers to increase the allowance to more than double the current figure, despite a previous one which racked up more than 36,000 signatures being rejected by the DWP. The latest calls are being made by Michael Thompson, who is also demanding the UK pension age is lowered...

September 19, 2023
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15Sep

2023 401 (k) Participant Study

By Charles Schwab  • The 2023 401(k) Participant study is an online study conducted by Logica Research. • The study was conducted from April 19 through May 2, 2023. • 1,000 401(k) plan participants completed the survey. • Ages 21-70 • Work for companies with 25+ employees that have 401(k) plans • Currently contribute to their companies’ 401(k) plans • Survey respondents include participants served by approximately 15 different retirement plan providers. • The typical (median) survey length was 10 minutes. Read book “here”

September 15, 2023
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15Sep

Solving the Puzzle within the Annuity Puzzle: Incorporating Irrevocability Aversion into Annuity Choice

By Spencer Look, Tao Guo & Yuanshan Cheng  Researchers have found that annuities provide substantial benefits to retirement investors. Income annuities, which require the purchaser to irrevocably exchange an insurance premium for future income, are typically considered the most efficient vehicle to generate lifetime income. However, the Life Insurance Marketing and Research Association (“LIMRA”) estimated that the actual sales of income annuities only accounted for 12% of income-focused annuity sales (LIMRA, 2022a). Most of the sales are attributable to deferred...

September 15, 2023
Articles, Pension design, , ,
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01Sep

Minimum eligibility age for social pensions and house hold poverty: Evidence from Mexico

By David Escamilla Guerrero, Clemente Avila Parra & Oscar Gálvez Soriano This paper examines the impact of social pensions on old-age poverty. To achieve causal identification, we leverage the reduction in the minimum eligibility age of Mexico's flagship non-means-tested social pension program. We find that the program's expansion significantly reduced extreme poverty, mainly among indigenous seniors and in rural areas. However, it had negligible effects on labor force participation, suggesting that social pensions were not effective in ensuring minimum...

September 1, 2023
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August 2023
25Aug

Future of Jobs Report 2023

By World Economy Forum  The past three years have been shaped by a challenging combination of health, economic and geopolitical volatility combined with growing social and environmental pressures. These accelerating transformations have and continue to reconfigure the world's labour markets and shape the demand for jobs and skills of tomorrow, driving divergent economic trajectories within and across countries, in developing and developed economies alike. The Fourth Industrial Revolution, changing worker and consumer expectations, and the urgent need for a green...

August 25, 2023
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25Aug

Retirement Security: Income and Wealth Disparities Continue through Old Age

By GAO Income and wealth inequality in the United States have increased over the last several decades. We looked at whether these trends continue for older Americans as they age. We compared income and wealth for all older households from 1989 through 2016 and found households in the top 20% saw disproportionately greater gains than other households. We also looked at income and wealth for a group of older Americans as they aged. We found disparities in income decreased, possibly due to...

August 25, 2023
Aging, Books, Books, Reports, , ,
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23Aug

Japan records its second-worst income disparity as society ages

Japan’s income inequality hit its second-worst level on record, according to a labor ministry survey conducted in 2021. The Gini coefficient--an index that measures income inequality on a scale ranging between 0 and 1--rose to 0.5700 based on initial income, or before distribution through taxation and social security, according to the Income Redistribution Survey released on Aug. 22. The coefficient, calculated based on income data from 2020, increased from 0.5594 in the previous survey in 2017. A 2014 survey saw the highest...

August 23, 2023
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22Aug

UK. PLSA: Can low earners be safely auto-enrolled in workplace pensions?

In the realm of pensions policy, there exists a significant knowledge gap when it comes to understanding and addressing the needs of low earners. While various segments of the population have been subject to extensive research, individuals with low incomes who are still engaged in employment have remained relatively understudied. The PLSA commissioned the Pensions Policy Institute (PPI) to evaluate the issue of low earners and whether AE could provide a way of improving their retirement outcomes. The subsequent report -...

August 22, 2023
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July 2023
23Jul

Strengthening Retirement Income Security: Fairer Tax Rules and More Options Needed

By Alexandre Laurin & George Turpie  Simple changes to tax rules can improve retirement security for Canadians, as well as make the retirement system more equitable among different classes of savers, and more efficient at managing longevity risks for capital decumulation. This E-Brief provides a discussion of needed retirement-related tax changes impacting members of capital accumulation plans, such as RRSPs and defined-contribution (DC) plans, divided into the accumulation and decumulation phases. Among the key tax changes recommended for the accumulation phase:...

July 23, 2023
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