Customize Consent Preferences

We use cookies to help you navigate efficiently and perform certain functions. You will find detailed information about all cookies under each consent category below.

The cookies that are categorized as "Necessary" are stored on your browser as they are essential for enabling the basic functionalities of the site. ... 

Always Active

Necessary cookies are required to enable the basic features of this site, such as providing secure log-in or adjusting your consent preferences. These cookies do not store any personally identifiable data.

No cookies to display.

Functional cookies help perform certain functionalities like sharing the content of the website on social media platforms, collecting feedback, and other third-party features.

No cookies to display.

Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics such as the number of visitors, bounce rate, traffic source, etc.

No cookies to display.

Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.

No cookies to display.

Advertisement cookies are used to provide visitors with customized advertisements based on the pages you visited previously and to analyze the effectiveness of the ad campaigns.

No cookies to display.

December 2023

Money Illusion in Retirement Savings with a Minimum Guarantee

By Catherine Donnelly, Gaurav Khemka & William Lim We investigate the impact of money illusion on the investment strategy and retirement outcomes of pre-retirees. Money illusion refers to the tendency of individuals to overlook the effects of inflation and focus on nominal rather than real terms. We solve and compare the optimal investment strategies for a pre-retiree who exhibits money illusion and aims to maximize the expected power utility of wealth at retirement, subject to a minimum guarantee constraint. While...

The Relationship between Retirement Adjustment and Personality Traits Among Elderly in Gamo Zone, Ethiopia

By Fekadu Mekuria Deme & Girma Gura Ayele The objective of this study was to investigate the relationship between retirement adjustment and personality traits among elderly. The study was conducted on 356 retired public servants aged 60 and above residing in Gamo zone, Southern Ethiopia. The study employed a correlational research design. A demographic questionnaire prepared by the researchers and 3 adapted instruments were used to collect the data. The data were analyzed using both descriptive and inferential statistics. The...

Household Financial Literacy and Retirement Planning in Rural China

By Yuting Qian, Weiqiang Tan & Jingbo Wu Rural villager’s retirement is an essential issue in China. This study investigates the level of financial literacy of rural residents and its relationship with retirement planning. In-depth survey data of rural residents in the Greater Bay Area reveal that rural residents with different demographic structures have different levels of financial literacy. The empirical study finds that financial literacy is positively related to retirement planning, and this result is robust. Further research shows...

Subjective survival beliefs and the life-cycle model

By Seung Yeon Jeong, Iqbal Owadally, Steven Haberman & Douglas Wright Evidence from panel surveys of households, collected over several years and in different countries, shows that people’s perception about their remaining lifetime deviates from actuarial data. This has consequences for consumption, savings and investment over an individual’s financial life cycle, and in particular for retirement planning and the purchase of annuities. We use data from the U.S. Survey of Consumer Finances to estimate subjective survival probabilities at different ages....

The health status of the retirement-age population: a first approach

By Laura Crespo & Juan F. Jimeno Rationale The health of the population aged 55 to 69 influences their labour supply and retirement decisions. This article aims to document their health status, in Spain and in other European countries, drawing on data from the Survey on Health, Ageing and Retirement in Europe (SHARE). Takeaways •There are marked differences by gender in the health status of the Spanish population aged 65 to 69. Among women, 62.9% report chronic health problems, 30.1% mobility limitations and 32.1%...

Augmenting the Funded Ratio: New Metrics for Liability Based Plans

By Sanjiv Ranjan Das, Daniel N Ostrov, Anand Radhakrishnan, Deep Srivastav & Wylie Tollette The primary metric used to determine the health of a liability based plan (LBP) is the funded ratio, which is the ratio of the LBP’s current assets to its present-valued liabilities. The funded ratio, however, cannot accommodate a considerable number of important financial factors, so we suggest three additional metrics of financial health, each connected to the probability of fulfilling the plan’s liabilities. The first two...

November 2023

Retirement Planning: The Volatility-Adjusted Coverage Ratio

By Javier Estrada  The important decisions that retirees have to make to try to achieve their financial goals during retirement often stem from models used by financial planners. Despite the important role it plays in many of those models, the failure rate has several limitations and many alternatives have been proposed. This article introduces a new metric, the volatility-adjusted coverage ratio, which incorporates the benefit (the coverage ratio) and the cost (the volatility of the portfolio) of the strategies considered....

ESG and Public Pension Investing in 2023: A Year-To-Date Recap and Analysis

By Joshua Lichtenstein, Michael Littenberg & Reagan Haas Since 2021, Ropes & Gray has been actively tracking the various approaches states have taken on how or whether environmental, social and governance (ESG) factors should be applied to the investment decisions for public retirement systems. States have used legislative, administrative and enforcement mechanisms to address this area, which has been complemented by Congressional Republicans’ various attempts to shine a spotlight on ESG in recent months. Judging by the significant uptick in...

Pension Reforms, Longer Working Horizons and Absence from Work

By Giorgio Brunello, Maria De Paola & Lorenzo Rocco Using matched employer-employee data for Italy and newly available information on sick leaves certificates, we study the effect of an exogenous increase in the length of the residual work horizon – triggered by a pension reform that increased minimum retirement age - on middle-aged employees' absence from work due to sick leaves. We find that this effect is positive for females and negative for males. After excluding health as a plausible...

Unionization of Retired Workers in Europe

By Vinzenz Pyka & Claus Schnabel We shed light on an understudied group: retirees in unions. Using representative individual-level data of 19 European countries, we find that the share of retirees in unions and the union density of retirees increased between 2008 and 2020. Econometric analyses indicate that on average retired workers' probability of union membership is 17 percentage points lower than that of active workers. This finding is consistent with social custom models and cost-benefit considerations. We further find that...