SIRN: Adequacy of Retirement Income (Sub-Topic)最新文献

{"title":"CARES Act: Implications for Retirement Security of American Workers","authors":"Jack L. VanDerhei","doi":"10.2139/ssrn.3665306","DOIUrl":"https://doi.org/10.2139/ssrn.3665306","url":null,"abstract":"Many provisions of the Coronavirus Aid, Relief, and Economic Security (CARES) Act were designed to provide relief to those American workers who do not have sufficient emergency savings to weather the current storm. These include increasing defined contribution plan loan limits to the greater of $100,000 or 100 percent of the vested account balance; suspending loan payments due on or before December 31, 2020, and deferring loan payments for up to one year; allowing distributions until December 31, 2020, of the lesser of 100 percent of the vested account balance or $100,000; and allowing repayment of coronavirus-related distributions (CRDs) over a three-year period. The question, however, is as follows: What is the cost of effectively using defined contribution plans as emergency savings vehicles in this way when it comes to the future retirement security of American workers? Using the Employee Benefit Research Institute’s (EBRI’s) Retirement Security Projection Model® (RSPM), we simulate the impact on retirement balances as a multiple of pay at age 65 for scenarios where employees take full advantage of the CARES Act flexibility to access their defined contribution plan. We generally find:<br><br>• There are limited reductions in projected retirement balances as a multiple of pay at age 65 in scenarios where employees pay back CRDs within the prescribed three-year timeframe or take new loans — even when workers reduce future contributions dollar for dollar in order to repay those loans.<br><br>• However, we see potentially significant reductions in retirement balances as a multiple of pay at age 65 when employees take full CRDs and fail to pay them back. This is especially true for older age cohorts.<br><br>• The most catstrophic scenario is one in which workers are provided CARES-Act-like access to withdrawals time and again as various crises occur. In other words, this is a scenario in which policymakers essentially turn defined contribution plans into de facto emergency savings vehicles. In this scenario, the overall median reduction in retirement balances as a multiple of pay at age 65 is 54 percent.<br><br>• Still, further analysis is warranted. In our preliminary analysis of potential actual aggregate utilization of CARES Act provisions based on employer responses to a Plan Sponsor Council of America (PSCA) survey, we find that reductions were very small. Even in the scenario in which employees fail to pay back CRDs, the aggregate impact — because of low estimated actual implementation and utilization of CARES Act provisions — is estimated to be less than one-half a percent.","PeriodicalId":313599,"journal":{"name":"SIRN: Adequacy of Retirement Income (Sub-Topic)","volume":"19 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-08-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127754311","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"How Accurate Are Retirees’ Assessments of Their Retirement Risk?","authors":"Wenliang Hou","doi":"10.2139/ssrn.3653456","DOIUrl":"https://doi.org/10.2139/ssrn.3653456","url":null,"abstract":"Retirees with limited financial resources face numerous risks, including out-living their money (longevity risk), investment losses (market risk), unexpected health expenses (health risk), the unforeseen needs of family members (family risk), and even retirement benefit cuts (policy risk). This study systematically values and ranks the financial impacts of these risks from both the objective and subjective perspectives and then compares them to show the gaps between retirees’ actual risks and their perceptions of the risks in a unified framework. It finds that 1) under the empirical analysis, the greatest risk is longevity risk, followed by health risk; 2) under the subjective analysis, retirees perceive market risk as the highest-ranking risk due to their exaggeration of market volatility; and 3) the longevity risk and health risk are valued less in the subjective ranking than in the objective ranking, because retirees underestimate their life spans and their health costs in late life.","PeriodicalId":313599,"journal":{"name":"SIRN: Adequacy of Retirement Income (Sub-Topic)","volume":"1 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130234118","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"The Rotten Deal: Managed Mutual Funds and Retirement Income","authors":"D. W. Rasmussen","doi":"10.2139/ssrn.3022002","DOIUrl":"https://doi.org/10.2139/ssrn.3022002","url":null,"abstract":"About 70 percent of mutual fund assets are in managed funds. These funds seek to earn an above average return for investors but, because of the up-front loads, fees and other costs, they generally earn less than the low cost index funds that only seek to get a return equal to that of the stock market. Investors can expect their retirement savings to be reduced by 25 percent or more by favoring managed funds over index funds. The costs imposed on investors in managed funds result in tens of billions of dollars in profit for the industry. Compromised retirement savings is of public concern if government programs are going to support elderly households in need. Two policy options are explored. One is focused on educating investors about the rotten deal offered by managed funds while the other is to impose a fiduciary responsibility on the industry that requires them to act in the best interests of its clients. There is ample evidence that the industry will vigorously combat such efforts.","PeriodicalId":313599,"journal":{"name":"SIRN: Adequacy of Retirement Income (Sub-Topic)","volume":"308 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2017-08-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122804429","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"What Do Subjective Assessments of Financial Well-Being Reflect?","authors":"S. Sass, Anek Belbase, Thomas Cooperrider, Jorge D. Ramos-Mercado","doi":"10.2139/ssrn.2577285","DOIUrl":"https://doi.org/10.2139/ssrn.2577285","url":null,"abstract":"Subjective financial assessments are used by social scientists as a measure of financial well-being and by households as the basis for action. Financial well-being, however, increasingly requires workers to build-up savings to meet hard-to-see future needs, specifically retirement, their children’s education, and paying off student loans. This paper analyzes data from the FINRA Investor Education Foundation’s 2012 Financial Capability Survey to test whether subjective financial assessments 1) primarily reflect day-to-day, rather than distant, financial concerns; 2) increasingly reflect distant concerns if the household’s day-to-day finances are in reasonably good shape; and 3) increasingly reflect distant concerns if the worker is financially literate. The paper found that: * Subjective financial assessments primarily reflect day-to-day conditions. * This remains the case even if the household’s day-to-day finances are in reasonably good shape. * Financial literacy enhances sensitivity to the lack of a retirement plan and having a mortgage greater than the value of one’s house, but it has no noticeable effect on sensitivity to life and medical insurance deficits, having an inactive retirement plan, not saving for college, or student debt burdens. The policy implications of the findings are: * Subjective financial assessments have become a poor measure of financial well-being. * Workers by themselves cannot be expected to devote much effort to addressing distant deficits. * Initiatives to improve well-being must raise awareness – or compensate for the lack of awareness – of hard-to-see distant future deficits.","PeriodicalId":313599,"journal":{"name":"SIRN: Adequacy of Retirement Income (Sub-Topic)","volume":"82 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2015-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130133675","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"The Impact of Leakages on 401(K) Accumulations at Retirement Age","authors":"Jack L. VanDerhei","doi":"10.2139/ssrn.2459397","DOIUrl":"https://doi.org/10.2139/ssrn.2459397","url":null,"abstract":"The simulation results for this testimony suggest that, assuming no participant behavior change for participation, contribution or asset allocation resulting from reduced access to 401(k) balances, retirement balances from 401(k) plans, and IRA rollovers originating in 401(k) plans, may be increased substantially for young employees with thirty or more years of eligibility if cashouts at job turnover, hardship withdrawals (and the accompanying suspension of contributions) and plan loan defaults were substantially reduced or eliminated. However, this analysis needs to be accompanied by a very strong caveat that, prior to policy making, there are clear data gaps that will need to be filled. For example, Holden and VanDerhei (2001) found that participants in plans with a loan option have higher contribution rates than those without such access, cet. par. It is likely that a similar relationship exists with respect to the availability of hardship withdrawals. The potential reduction in participation and contribution rates from reducing or eliminating access to cashouts at job change would likely be even greater; however, since this is not a plan design variable that be controlled by the plan sponsor, there is no way to quantify the likely impact based on historical data.","PeriodicalId":313599,"journal":{"name":"SIRN: Adequacy of Retirement Income (Sub-Topic)","volume":"72 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2014-06-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122950418","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Health, Pension Benefits and Longevity: How They Affect Household Savings?","authors":"Najat el Mekkaoui De Freitas, Joaquim Oliveira Martins","doi":"10.2139/ssrn.2354919","DOIUrl":"https://doi.org/10.2139/ssrn.2354919","url":null,"abstract":"This paper analyses the impact of health, pension systems and longevity on savings. It uses a simple life-cycle model embodying social transfers (health care and pension expenditures) and changes in longevity to determine the level of household savings. From this model, we derived an econometric specification, augmented with the effects of public budget balances. The model is estimated for a panel of 22 OECD countries for the period 1970-2009. Our principal result is that, from the point of view of incentive to save, health transfers have a similar impact as pension replacement rates. Therefore, welfare reforms that reduce replacement rates without reforming health system may not have all the expected impact on household savings. In line with life-cycle theory, we found that longevity increases saving ratios.","PeriodicalId":313599,"journal":{"name":"SIRN: Adequacy of Retirement Income (Sub-Topic)","volume":"38 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2013-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122430845","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Reducing Retirement Risk with a Rising Equity Glide-Path","authors":"W. Pfau, Michael E. Kitces","doi":"10.2139/SSRN.2324930","DOIUrl":"https://doi.org/10.2139/SSRN.2324930","url":null,"abstract":"This study explores the issue of what is an appropriate default equity glide-path for client portfolios during the retirement phase of the life cycle. We find, surprisingly, that rising equity glide-paths in retirement – where the portfolio starts out conservative and becomes more aggressive through the retirement time horizon – have the potential to actually reduce both the probability of failure and the magnitude of failure for client portfolios. This result may appear counter-intuitive from the traditional perspective, which is that equity exposure should decrease throughout retirement as the retiree’s time horizon (and life expectancy) shrinks and mortality looms. Yet the conclusion is actually entirely logical when viewed from the perspective of what scenarios cause a client’s retirement to “fail” in the first place. In scenarios that threaten retirement sustainability – e.g., an extended period of poor returns in the first half of retirement – a declining equity exposure over time will lead the retiree to have the least in stocks if/when the good returns finally show up in the second half of retirement (assuming the entire retirement period does not experience continuing poor returns). With a rising equity glide-path, the retiree is less exposed to losses when most vulnerable in early retirement and the equity exposure is greater by the time subsequent good returns finally show up. In turn, this helps to sustain greater retirement income over the entire time period. Conversely, using a rising equity glide-path in scenarios where equity returns are good early on, the retiree is so far ahead that their subsequent asset allocation choices do not impact the chances to achieve the original retirement goal.","PeriodicalId":313599,"journal":{"name":"SIRN: Adequacy of Retirement Income (Sub-Topic)","volume":"386 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2013-09-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115912632","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Residents in Seniors Housing and Care Communities: Overview of the Residents Financial Survey","authors":"Norma B. Coe, A. Wu","doi":"10.2139/SSRN.2316883","DOIUrl":"https://doi.org/10.2139/SSRN.2316883","url":null,"abstract":"With the leading edge of the baby boom generation reaching retirement age, decisionmakers need a comprehensive understanding of their social, economic, and health characteristics – both in terms of resources and needs – in order to adopt effective public policies and private services to meet the needs of an aging population. One area of particular importance is their need for housing and long-term care services. A variety of options is available to meet these needs, including independent living (IL) and assisted living (AL) residences…","PeriodicalId":313599,"journal":{"name":"SIRN: Adequacy of Retirement Income (Sub-Topic)","volume":"8 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2011-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124186209","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"Why Aren't More Families Buying Life Insurance?","authors":"M. Chambers, D. Schlagenhauf, Eric R. Young","doi":"10.2139/ssrn.1780297","DOIUrl":"https://doi.org/10.2139/ssrn.1780297","url":null,"abstract":"This paper explores life insurance holdings from a general equilibrium perspective. Drawing on the data explored in Chambers, Schlagenhauf, and Young (2003), we calibrate an overlapping generation’s life cycle economy with incomplete asset markets to match facts regarding the uncertainty of income and demographics. We then estimate that life insurance holdings for the purpose of smoothing family consumption are so large that they constitute a puzzle from the perspective of standard economic theory. Furthermore, the welfare gains from a life insurance market are concentrated in the minds of households who use the real world market very little.","PeriodicalId":313599,"journal":{"name":"SIRN: Adequacy of Retirement Income (Sub-Topic)","volume":"23 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2011-01-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116570993","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}

{"title":"On Efficiency of Mean-Variance Based Portfolio Selection in DC Pension Schemes","authors":"Elena Vigna","doi":"10.2139/ssrn.1775806","DOIUrl":"https://doi.org/10.2139/ssrn.1775806","url":null,"abstract":"We consider the portfolio selection problem in the accumulation phase of a defined contribution (DC) pension scheme. We solve the mean-variance portfolio selection problem using the embedding technique pioneered by Zhou and Li (2000) and show that it is equivalent to a target-based optimization problem, consisting in the minimization of a quadratic loss function. We support the use of the target-based approach in DC pension funds for three reasons. Firstly, it transforms the difficult problem of selecting the individual's risk aversion coefficient into the easiest task of choosing an appropriate target. Secondly, it is intuitive, flexible and adaptable to the member's needs and preferences. Thirdly, it produces final portfolios that are efficient in the mean-variance setting. We address the issue of comparison between an efficient portfolio and a portfolio that is optimal according to the more general criterion of maximization of expected utility (EU). The two natural notions of Variance Inefficiency and Mean Inefficiency are introduced, which measure the distance of an optimal inefficient portfolio from an efficient one, focusing on their variance and on their expected value, respectively. As a particular case, we investigate the quite popular classes of CARA and CRRA utility functions. In these cases, we prove the intuitive but not trivial results that the mean-variance inefficiency decreases with the risk aversion of the individual and increases with the time horizon and the Sharpe ratio of the risky asset. Numerical investigations stress the impact of the time horizon on the extent of mean-variance inefficiency of CARA and CRRA utility functions. While at instantaneous level EU-optimality and efficiency coincide (see Merton (1971)), we find that for short durations they do not differ significantly. However, for longer durations - that are typical in pension funds - the extent of inefficiency turns out to be remarkable and should be taken into account by pension fund investment managers seeking appropriate rules for portfolio selection. Indeed, this result is a further element that supports the use of the target-based approach in DC pension schemes.","PeriodicalId":313599,"journal":{"name":"SIRN: Adequacy of Retirement Income (Sub-Topic)","volume":"64 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2010-04-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"127021052","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}