Journal
JOURNAL OF BANKING & FINANCE
Volume 114, Issue -, Pages -Publisher
ELSEVIER
DOI: 10.1016/j.jbankfin.2020.105783
Keywords
Life cycle saving; Household finance; Annuity; Longevity risk; 401(k) plan; Retirement
Categories
Funding
- TIAA Institute
- German Investment and Asset Management Association (BVI)
- SAFE Research Center - State of Hessen
- Pension Research Council/Boettner Center at The Wharton School of the University of Pennsylvania
Ask authors/readers for more resources
The US Treasury recently permitted deferred longevity income annuities to be included in pension plan menus as a default payout solution, yet little research has investigated whether more people should convert some of the $18 trillion they hold in employer-based defined contribution plans into lifelong income streams. We investigate this innovation using a calibrated lifecycle consumption and portfolio choice model embodying realistic institutional considerations. Our welfare analysis shows that defaulting a modest portion of retirees' 401(k) assets (over a threshold) is an attractive way to enhance retirement security, enhancing welfare by up to 20% of retiree plan accruals. (C) 2020 The Authors. Published by Elsevier B.V.
Authors
I am an author on this paper
Click your name to claim this paper and add it to your profile.
Reviews
Recommended
No Data Available