Key Findings Details
Extending Life Cycle Models of Optimal Portfolio Choice: Integrating Flexible Work, Endogenous Retirement, and Investment Decisions with Lifetime Payouts
Jing Jing Chai, Wolfram J. Horneff, Raimond H. Maurer and Olivia S. Mitchell
- Having access to annuities is positive and important in the life cycle context, as is labor market flexibility in the form of adjustable weekly work hours and retirement ages.
- People with flexible retirement and flexible work hours, in addition to annuitized saving, are much better off. Their gain in well-being is worth more than 62 percent of their first-year earnings.
- As Baby Boomers move towards retirement, traditional fixed-payout annuities will gradually be replaced by investment-linked payout annuities.