Here are some of the latest reports, surveys, and studies related to retirement, including research into finding the optimal investment strategy, what goes into leading a meaningful life, and elder fraud.
Investors who are about to retire are first and foremost concerned with supporting their spending needs throughout retirement. But they also derive satisfaction from growing their wealth beyond what is needed to support consumption in order to leave a bequest to their heirs or chosen charities.
According to the authors of SSRN: Toward Determining the Optimal Investment Strategy for Retirement, the predominant metric for evaluating retirement investment strategies is the failure rate. However, it fails to distinguish between strategies that fail early in retirement from those that fail near the end of retirement.
Moreover, researches said, it fails to account for potential bequests. To overcome these shortcomings the authors propose a new metric, the coverage ratio, which is more comprehensive and informative than the failure rate. In addition, they propose a utility function to evaluate the coverage ratio, which penalizes shortfalls more than it rewards surpluses. Finally, they use the framework they propose to determine the optimal allocation to stocks and bonds using both historical and simulated returns.
Here's more retirement-related research:
Approximately 15% of households have a negative or zero net worth, leaving them vulnerable to financial insecurity at retirement. Some are vulnerable at retirement, in part, due to their lack of saving. However, some are also at risk because of their rates of consumption, relative to their income. There have been several studies that show that Blacks and Latinos have low savings rates, in part due to higher conspicuous consumption. Conspicuous consumption is defined as the buying of goods or services solely for the purpose of public display of wealth, as opposed to covering basic needs. Unfortunately, there are few scales that assess the construct with appropriate psychometric properties. This work attempts to provide a scale by which practitioners can measure consumption/spending and thus assess the threat of financial vulnerability. The creation of adequate measures of consumption may elucidate whether the issue of financial insecurity is related to financial literacy, inability to save or consumption. Ultimately, the goal of this research is to sharpen the ability of policy makers, researchers, and practitioners in order to assist communities most at risk for financial insecurity. Read more in SSRN: Measuring Conspicuous Consumption
U.S. Government Accountability Office: Medicare: Voluntary and Mandatory Episode-Based Payment Models and Their Participants
Proceedings of the National Academy of Sciences: Leading a meaningful life at older ages and its relationship with social engagement, prosperity, health, biology, and time use
U.S. Senate Special Committee on Aging: Fighting Elder Fraud: Progress Made, Work to Be Done
Center for Retirement Research at Boston College: Modernizing Social Security: Minimum Benefits
National Bureau of Economic Research: Retirement Choices by State and Local Public Sector Employees: The Role of Eligibility and Financial Incentives
Center for Retirement Research at Boston College: Competition, Asymmetric Information, and the Annuity Puzzle: Evidence from a Government-Run Exchange in Chile and Failure to Contribute: An Estimate of the Consequences of Non- and Underpayment of Self-Employment Taxes by Independent Contractors and On-Demand Workers on Social Security
Got questions about the new tax law, Social Security, retirement, investments, or money in general? Want to be considered for a Money Makeover? Email Robert.Powell@TheStreet.com.
Here are some of the latest reports, surveys, and studies related to retirement, including research into finding the optimal investment strategy, what goes into leading a meaningful life, and elder fraud. Subscribe for full article
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