In: Ekonomický časopis/Journal of Economics, vol. 64, no. 2
Ján Šebo - Ľubica Šebová
Details:
Year, pages: 2016, 169 - 190
Keywords:
annuity, programmed withdrawal, private DC pension, information asymmetry
JEL Classification: D14, D81, E21, G18, G23
Article type: vedecký / article
About article:
Immediate annuitisation as a strategy for a welfare maximization for a payout phase in private pension schemes has been widely criticized. We examine the self-annuitisation strategies under two different consumption rates using programmed withdrawal compared to the immediate annuitization for a retired individual subject to uncertain portfolio returns and longevity risk. The aim is to examine the utility of both approaches under the existence of longevity risk on one side and bequest on the other. Results could serve as a basis for further discussion on improving the legislature on pay-out phase in Slovak private DC pension pillar.
Immediate annuitisation as a strategy for a welfare maximization for a payout phase in private pension schemes has been widely criticized. We examine the self-annuitisation strategies under two different consumption rates using programmed withdrawal compared to the immediate annuitization for a retired individual subject to uncertain portfolio returns and longevity risk. The aim is to examine the utility of both approaches under the existence of longevity risk on one side and bequest on the other. Results could serve as a basis for further discussion on improving the legislature on pay-out phase in Slovak private DC pension pillar.
How to cite:
ISO 690:
Šebo, J., Šebová, Ľ. 2016. Suboptimality of Immediate Annuitization in Private Pension Schemes. In Ekonomický časopis/Journal of Economics, vol. 64, no.2, pp. 169-190. 0013-3035.
APA:
Šebo, J., Šebová, Ľ. (2016). Suboptimality of Immediate Annuitization in Private Pension Schemes. Ekonomický časopis/Journal of Economics, 64(2), 169-190. 0013-3035.