October 2023
06Oct

The Vanguard Retirement Outlook: A national perspective on retirement readiness

By Fu Tan, Fiona Greig, Andrew S. Clarke, Kevin Khang, Kate McKinnon & Victoria Zhang The global retirement landscape is changing. As populations age, government retirement benefits are under pressure. At the same time, the shift from defined benefit to defined contribution workplace retirement plans means that workers bear more responsibility for managing capital markets risk and turning accumulated savings into retirement income. And many workers have no access to a workplace plan. In the United States, the figure is about...

October 6, 2023
Books, Books, Reports, System Characterization, ,
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06Oct

Replacement Rates and the Retirement Crisis

By Andrew G. Biggs  In 2014, the annual Social Security Trustees Report removed measures of Social Security replacement rates, which represent Social Security retirement benefits as a percentage of pre-retirement earnings. The Trustees expressed concerns that the Social Security Administration’s (SSA) actuaries’ methodology produced results that differed meaningfully from other common approaches. In 2023, the Social Security Trustees returned replacement rates to the report, without changes to the SSA methodology or discussion of their decision. The SSA replacement rate methodology produces...

October 6, 2023
Adequacy, Articles, , , ,
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September 2023
29Sep

US. Workers’ expectations about choosing when to retire unrealistic – study

Pre-retirees may have unrealistic expectations about how long they will stay in the workforce, according to a new research report released Sept. 28 by nonprofit Transamerica Center for Retirement Research in collaboration with Transamerica Institute. Two-thirds of workers age 50 or older (66%) expect to retire after age 65 or do not plan to retire at all, an expectation inconsistent with reality as the majority of retirees (58%) retired before 65, the study found. More than half of retirees, 56%, retired...

September 29, 2023
News,
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19Sep

US. Retirement plan derailed: 40% forced to stop working earlier than expected

However carefully you may plan for your retirement, the actual event might still catch you off guard. Financial advisers across the industry report that 40% of their retired clients were forced into retirement, according to a recent survey by Edward Jones. And 97% of the financial advisers surveyed agreed with the statement that retirement involved more surprises and challenges than their clients expected. The biggest financial shocks for retirees were cost-of-living increases (29%), having to provide financial assistance for family or...

September 19, 2023
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15Sep

Solving the Puzzle within the Annuity Puzzle: Incorporating Irrevocability Aversion into Annuity Choice

By Spencer Look, Tao Guo & Yuanshan Cheng  Researchers have found that annuities provide substantial benefits to retirement investors. Income annuities, which require the purchaser to irrevocably exchange an insurance premium for future income, are typically considered the most efficient vehicle to generate lifetime income. However, the Life Insurance Marketing and Research Association (“LIMRA”) estimated that the actual sales of income annuities only accounted for 12% of income-focused annuity sales (LIMRA, 2022a). Most of the sales are attributable to deferred...

September 15, 2023
Articles, Pension design, , ,
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15Sep

Survey Reveals That South Africans Fear Retirement More Than Death

The survey, conducted among over 1900 South African consumers aged between 25 and 65 years, paints a picture of apprehension and challenges surrounding retirement amongst the country’s citizens. It also sheds light on the significant fears and challenges people face right now in securing savings for their retirement – with prevalent concerns being the high cost of living, unemployment, and personal debt. This concurs with findings from the 2023 Old Mutual Savings and Investment Survey (OMSIM) that show that retirement does...

September 15, 2023
News,
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08Sep

Racial and Ethnic Differences in Longevity Perceptions and Implications for Financial Decision-Making

By Abigail Hurwitz, Olivia S. Mitchell & Orly Sade  Inaccurate perceptions regarding life expectancy can lead to suboptimal financial decisions with long-term consequences, including undersaving prior to retirement, and overspending during retirement. As prior research suggests that Covid-19 mortality has disproportionately harmed those with low incomes, African Americans, and Hispanics in the United States, we seek to determine whether subjective survival perceptions among these groups changed in a manner consistent with observed outcomes. We fielded two online experimental surveys of...

September 8, 2023
Articles, Savings, , , ,
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04Sep

7 Expenses Most Likely To Drain Your Retirement Savings: How To Plan for Each One

You’re going to spend a good portion of your life working and saving for retirement. Once you reach that milestone, you want to feel confident that your nest egg is big enough to cover your needs in your golden years. As you’re planning for retirement, it’s important to anticipate some of the costs that could eat into your savings. Here are seven expenses that can drain your retirement savings — and how to plan for them. Healthcare Even with Medicare, out-of-pocket healthcare expenses can...

September 4, 2023
News
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01Sep

Contingency Fund: Individual Retiree Risk Management

By Jason Branning & Ray Grubbs  The goal of this article is to provide an actionable framework for contingency planning for individual retirees through the modern retirement theory (MRT) perspective. Contingency planning encompasses a retiree’s risk management processes, techniques, and strategies, along with a choice architecture. Our goal is to provide insights that are mitigating to those conditions within longevity that can impair or impact a retiree’s ability to remain retired. We offer three risk categories—known, unknown, and unknowable—as an...

September 1, 2023
Articles, Savings, ,
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01Sep

Family Planning Confronts Delayed Retirement in China: The Retirement Intention of Only-Child Parents

By Xiao Yu, Yingdong Xu, Yue Sun & Luyao Jiao By establishing a labor-retirement model within China’s unique intergenerational support culture and one-child policy, this study provides evidence of the one-child policy’s early effect on individuals’ retirement decisions. This finding highlights a contradiction between the retirement intentions of the 1960s and 1970s generations, who are most affected by the one-child policy, and the delayed retirement policy of Chinese government. Utilizing data from the CHARLS 2011-2018 and employing OLS, IV, and...

September 1, 2023
Aging, Articles, , , ,
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