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Drawing Down Retirement Financial Savings: A Welfare Analysis using French data
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Orientador(es)
Resumo(s)
In recent decades, most countries have responded to increased longevity, population ageing, and low market returns with systemic and/or gradual parametric pension reforms. The trend towards individual accounts in public and private funded pension schemes augmented the importance of studying the decumulation phase of pensions. This paper uses a simulation design to empirically investigate the individual welfare generated from alternative annuitization and self-managed fixed, variable and hybrid drawdown strategies. A time-separable utility function is used to represent an individual's preferences towards consumption and bequest, risk aversion and intertemporal discounting and to quantitively assess the range of retirement outcomes from competing decumulation designs. The setting comprises a stochastic mortality and investment risk framework calibrated to French interest rate, stock market and mortality data from 2010 to 2019. The results show that self-managed variable decumulation strategies may generate higher income at the expense of high risk taking, more volatile income streams and no longevity insurance. Annuitization strategies involving longevity-linked life annuities and hybrid solutions provide higher expected lifetime utility at the expense of bequest motives.
Descrição
Bravo, J. M., & Freitas, N. E. M. D. (2021). Drawing Down Retirement Financial Savings: A Welfare Analysis using French data. In 2021 The 5th International Conference on E-Commerce, E-Business and E-Government (ICEEG '21) (pp. 152-158). Association for Computing Machinery (ACM). https://doi.org/10.1145/3466029.3466041 -------------------------------------------------------------- Funding Information: Najat El Mekkaoui acknowledges support by Groupama Gan Vie, Groupama Asset Management and Deloitte. Jorge M. Bravo acknowledges financial support by Portuguese national funds through FCT under the project UIDB/04152/2020 - Centro de Investigação em Gestão de Informação (MagIC). Publisher Copyright: © 2021 ACM.
Palavras-chave
Draw down strategies Pensions Longevity-linked life annuity Longevity insurance Retirement savings Human-Computer Interaction Computer Networks and Communications Computer Vision and Pattern Recognition Software SDG 1 - No Poverty SDG 10 - Reduced Inequalities
Contexto Educativo
Citação
Editora
ACM - Association for Computing Machinery