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Portfolio decisions on life annuities and financial assets with longevity and income uncertainty

Pech, Susanne - 2004

There are two stylised facts, namely weak demand for life-annuities and flat age-wealth profile that contradict the life-cycle hypothesis. In this paper we design a theoretical framework, which combines plausible arguments, which have been put forward in the literature to reconcile theory with...

Persistent link: https://www.econbiz.de/10009748294

Betting on a long life : the role of subjective life expectancy in the demand for private pension insurance of german households

Schulte, Katharina; Dörr, Ulrike - 2010

uptake of German households in a probit model. Using survey data on savings and old-age provision, we find that subjective …

Persistent link: https://www.econbiz.de/10003969303

How Would 401(k) ‘Rothification’ Alter Saving, Retirement Security, and Inequality?

Horneff, Vanya - 2020

The U.S. has long incentivized retirement saving in 401(k) and similar retirement accounts by permitting workers to defer taxes on contributions, levying them instead when retirees withdraw funds in retirement. This paper develops a dynamic life-cycle model to show how and whether...

Persistent link: https://www.econbiz.de/10012846953

Behavioral Aspects of Household Portfolio Choice : Effects of Loss Aversion on Life Insurance Uptake and Savings

Hwang, In Do - 2017

This paper investigates how loss-aversion affects individuals' decisions on savings and insurance purchase …. Specifically, this paper empirically tests if prospect theory's loss aversion decreases insurance demand and increases savings …-life insurance, which serves as a partial savings instrument. These individuals also hold a higher level of wealth than others …

Persistent link: https://www.econbiz.de/10012962197

Countercyclical Retirement Accounts

Love, David A. - 2017

during good times and increase spending during bad times -- a cyclical matching rate on contributions to retirement savings … accounts. The combination of matching rates and matching limits on retirement savings plans creates sharp kinks in … bad aggregate states? I model an economy with liquid and illiquid savings accounts in which matching is suspended during …

Persistent link: https://www.econbiz.de/10012968411

Financial Literacy and Precautionary Insurance

Kubitza, Christian - 2020

We study insurance markets with individuals that have limited financial literacy. In our model, complexity of insurance contracts causes individuals to be uncertain about insurance payouts. As a result, a trade-off between second-order (risk aversion) and third-order (prudence) risk preferences...

Persistent link: https://www.econbiz.de/10012849957

Precautionary Saving, Insurance, and the Origins of Workers' Compensation

Kantor, Shawn; Fishback, Price V. - 2010

In this article we test whether the introduction of social insurance has led to a reduction in private insurance purchases and precautionary saving by examining the introduction of workers' compensation. Our empirical analysis is based on the financial decisions of over 7,000 households surveyed...

Persistent link: https://www.econbiz.de/10014120025

Funded and Unfunded Pension Schemes : Risk, Reutrn and Welfare

Miles, David - 2021

This paper uses stochastic simulations on calibrated models to assess the optimal degree of reliance on funded pensions and on a particular type of unfunded (PAYG) pension. Surprisingly little is known about the optimal split between funded and unfunded systems when there are sources of...

Persistent link: https://www.econbiz.de/10013321171

Precautionary risk reduction and saving : Two sides of the same coin?

Peter, Richard; Hofmann, Annette - 2022

We compile, generalize and extend the results about the comparative static effects of risk changes on optimal risk-reduction and saving behavior. We use the time-separable discounted expected-utility model and consider income risk, inflation risk, and interest rate risk. For each type of risk,...

Persistent link: https://www.econbiz.de/10013293191

Fixed and variable longevity annuities in defined contribution plans : optimal retirement portfolios taking social security into account

Horneff, Vanya; Maurer, Raimond; Mitchell, Olivia S. - 2023

This paper investigates retirees' optimal purchases of fixed and variable longevity income annuities using their defined contribution (DC) plan assets and given their expected Social Security benefits. As an alternative, we also evaluate using plan assets to boost Social Security benefits...

Persistent link: https://www.econbiz.de/10013554899