February 2023
09Feb

Ghana debt swap deal ‘good for you’, finance minister tells retirees

Ghana's finance minister told a group of protesting retiree bondholders on Monday they were being a offered a good deal, as the government of the struggling West African nation pushes to get a domestic debt exchange over the line by Tuesday. Ghana launched a debt swap plan in December as part of attempts to address a spiralling economic crisis, but it has struggled to convince bondholders to register, in part due to a lack of clarity over its terms and...

February 9, 2023
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02Feb

U.S. A Retirement Income Distribution Plan Is as Critical as Saving

The majority of your life is spent in accumulation mode — earning a steady income and putting money aside for things like retirement, savings, your child’s education or a dream vacation home. After years of investing and saving, it is critical to shift your mindset out of accumulation mode and into distribution, or decumulation, mode when retirement nears. Making that mental shift is difficult for most, but having a comprehensive wealth plan that includes a retirement income distribution strategy...

February 2, 2023
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January 2023
06Jan

Standardized, Unitized, Accretive Longevity Insurance: Lessons from the Differing Demand for Annuities and Life Insurance

By Andrew Stumpff Morrison The historic U.S. shift from defined-benefit to defined-contribution employer-sponsored retirement plans has produced, among other things, a reduction in sharing of the risk of outliving one’s retirement savings. Commercial annuity contracts are available to insure this risk, but despite efforts to encourage their acquisition, few people own them. Close comparison with another life-cycle risk – that addressed by life insurance, which is more widely purchased by consumers – highlights as a probable reason for this low...

January 6, 2023
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06Jan

Optimal Retirement with Disability Pensions

By Hans Fehr & Adrian Fröhlich This paper develops a general equilibrium life-cycle model with endogenous retirement and disability risk, in order to quantify the impact of recent pension reforms in Germany. At certain ages households may either apply for disability pensions (DP) or old-age pensions (OAP), de-pending on eligibility rules and the generosity of the two programs. Our policy analysis focus on the increase in the normal retirement age (NRA) from age 65 to 67 (Reform 2007) and the recent...

January 6, 2023
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October 2022
26Oct

Canada. Most employer retirement plans don’t support decumulation

Defined-contribution pension plans and group RRSPs have become the dominant forms of employer retirement programs, but they’re proving inadequate once plan members reach the decumulation phase, a report from the C.D. Howe Institute says. Capital accumulation plans (CAPs) such as DC pensions and group RRSPs focus on accumulating assets rather than providing retirement income for life to plan members. That leaves many retirees unprepared for restructuring their assets into income after they retire, the report said. “We believe the time is right...

October 26, 2022
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September 2022
30Sep

The Safe Withdrawal Rate: Evidence from a Broad Sample of Developed Markets

By Aizhan Anarkulova, Scott Cederburg, Michael S. O'Doherty & Richard W. Sias We use a comprehensive new dataset of asset-class returns in 38 developed countries to examine a popular class of retirement spending rules that prescribe annual withdrawals as a constant percentage of the retirement account balance. A 65-year-old couple willing to bear a 5% chance of financial ruin can withdraw just 2.26% per year, a rate materially lower than conventional advice (e.g., the 4% rule). Our estimates of failure...

September 30, 2022
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30Sep

Do the Retired Elderly in Europe Decumulate Their Wealth? The Importance of Bequest Motives, Precautionary Saving, Public Pensions, and Homeownership

By Charles Yuji Horioka & Luigi Ventura In this paper, we use micro data on a large number of European countries from the Survey of Health, Ageing and Retirement in Europe (SHARE) to examine the wealth accumulation (saving) behavior of the retired elderly in Europe. To summarize our main findings, we find that less than half of the retired elderly in Europe are decumulating their wealth and that the average wealth accumulation rate of the retired elderly in Europe is...

September 30, 2022
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June 2022
17Jun

Do Retirees Want to Consume More, Less or the Same as they Age?

By Anqi Chen & Alicia H. Munnell Whether households prefer a constant, increasing, or decreasing path of consumption in retirement has important implications for our understanding of retirement adequacy. Financial planners and researchers often assume that retirees would like to maintain a constant standard of living. Similarly, Social Security benefits are based on the premise that people want steady inflation-adjusted benefits. However, several studies suggest that retired households actually decrease their consumption over time. This brief, which reports the results of...

June 17, 2022
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May 2022
17May

UK. Public-Sector Workers Delay DC Plan Decumulation

Almost half of public sector employees are taking no action to decumulate defined contribution plan retirement savings once retired, according to Mission Square Retirement research released this month. Josh Franzel, managing director at the Mission Square Research Institute, says the results of their research can help plan sponsors understand how public sector participants and retirees—most of whom also have a defined benefit plan—behave regarding their supplemental defined contribution savings. “It’s important to take a holistic view from a plan sponsor perspective...

May 17, 2022
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12May

Nigeria. Civil war veterans protest 44 years unpaid pensions in Ibadan

Some retired military men who fought during the Nigerian civil war protested their 44 years of unpaid pensions on Wednesday in Ibadan, Oyo State capital. The group under the umbrella of the First Intake Able Voluntary Retired Or Discharged Ten Or More Years in Military Service, and led by their national coordinator, Babawande Philips, took to the streets of Ibadan with placards bearing various inscriptions. Mr Philips said the ex-military men had continued to suffer in the last 44 years when...

May 12, 2022
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