Innovations in Retirement Financing

by Mitchell, Olivia S.; Bodie, Zvi; Hammond, P. Brett; Zeldes, Stephen

• ISBN13: 9780812236415
• ISBN10: 0812236416
• Format: Hardcover
• Copyright: 2002-01-29
• Publisher: Univ of Pennsylvania Pr

Summary

Only half of working Americans admit they have thought about saving for retirement, and many of those who do try to save don't know whether they are setting aside enough. How, then, can employees, their employers, and the public sector boost old-age financial security? The contributors to this volume--economists, financial advisers, and housing and benefits specialists--argue that a strong retirement income system requires attention not only to assets conventionally dedicated to retirement purposes, such as pensions, but also to the broader determinants of retiree wealth including housing, health, longevity, and intellectual capital. This book proposes fresh approaches, including cash-balance pension plans, reverse-annuity mortgages, inflation-indexed bonds, and long-term care insurance. A framework chapter sets the stage by examining what retirement planning can be expected to accomplish and how planning reduces risks by hedging, insuring, and diversifying.

Author Biography

Olivia S. Mitchell is Executive Director of the Pension Research Council and International Foundation of Employee Benefit Plans Professor of Insurance and Risk Management at The Wharton School, University of Pennsylvania. Zvi Bodie is Professor of Finance at Boston University. P. Brett Hammond is Manager of Corporate Projects at TIAA-CREF. Stephen Zeldes is Benjamin Rosen Professor of Economics and Finance at Columbia University.

Table of Contents

Preface	vii
Part I. Sources of Financial Retirement Risk
Analyzing and Managing Retirement Risks	3	(17)
Zvi Bodie
P. Brett Hammond
Olivia S. Mitchell
Income Shocks, Asset Returns, and Portfolio Choice	20	(30)
Steven J. Davis
Paul Willen
Worklife Determinants of Retirement Income: Differences Across Men and Women	50	(27)
Philip B. Levine
Olivia S. Mitchell
John W. R. Phillips
Part II. Developments in Retirement Planning Models
An Economic Approach to Setting Retirement Saving Goals	77	(29)
B. Douglas Bernheim
Lorenzo Forni
Jagadeesh Gokhale
Laurence J. Kotlikoff
Retirement Planning and the Asset/Salary Ratio	106	(26)
Martin L. Leibowitz
J. Benson Durham
P. Brett Hammond
Michael Heller
Outcomes-Based Investing with Efficient Monte Carlo Simulation	132	(17)
Jason Scott
Part III. Innovations for Managing Retirement Wealth
Taking the Subsidy Out of Early Retirement: Converting to Hybrid Pensions	149	(26)
Robert L. Clark
Sylvester J. Schieber
Mortality Risk, Inflation Risk, and Annuity Products	175	(23)
Jeffrey R. Brown
Olivia S. Mitchell
James M. Poterba
Integrating Life Annuities and Long-Term Care Insurance: Theory, Evidence, Practice, and Policy	198	(24)
Mark J. Warshawsky
Brenda C. Spillman
Christopher M. Murtaugh
Survivor Bonds and Compulsory Annuitization: Reducing the Cost of Pension Provision	222	(12)
David Blake
William Burrows
J. Michael Orszag
Turning Assets into Cash: Problems and Prospects in the Reverse Mortgage Market	234	(20)
Andrew Caplin
Aging and Housing Equity	254	(28)
Steven F. Venti
David A. Wise
Risk Management Through International Diversification: The Case of Latin American Pension Funds	282	(31)
P. S. Srinivas
Juan Yermo
Contributors	313	(6)
Index	319