Lifetime Income & Retirement Security

July 2013

Many investment companies have begun providing their defined-contribution pension participants with individualized, retirement income projections. The U.S. Congress is currently considering whether to require them all to do so. Evidence on the potential impact is scant, though a large body of economic research suggests that individuals are not currently making optimal retirement-saving decisions.

July 2013

Given the widespread transition from defined benefit (DB) to defined contribution (DC) retirement plans, Americans increasingly face the challenge of assessing whether their saving behavior is likely to provide a secure retirement. Appropriate saving choices in one’s working years requires understanding how current saving choices translate into income in retirement, which requires a high level of financial sophistication.

March 2013

During the economic doldrums that have followed The Great Recession, employees in the education sector (administrators, staff, and teachers or faculty at both the K-12 level and the post-secondary level) are confident about both their retirement savings behavior and their likely retirement outcomes. African American and white American employees in the education sector are more optimistic about their retirement planning and prospects than are U.S. workers overall. Education sector employees—both African Americans (87%) and white Americans (88%)—are more likely than U.S.

June 2012

Much has been written about the financial condition of pension plans and plan reform in the public sector, but little has been documented about public sector workers’ confidence, expectations and behavior with respect to retirement planning and saving. A representative sample of state and local government employees was surveyed to examine these issues.

May 2012

This paper assesses the impact of variable investment-linked deferred annuities (VILDAs) on lifecycle consumption, saving, and portfolio allocation patterns given stochastic and systematic mortality. Insurers have taken two approaches to manage systematic mortality risks, namely self-insurance and risk transfer to purchasers of the annuity products. We demonstrate that self-insurance leads to high loadings, so that households offered a choice would favor the risk transfer scheme.

May 2012

This paper assesses the impact of variable investment-linked deferred annuities (VILDAs) on lifecycle consumption, saving, and portfolio allocation patterns given stochastic and systematic mortality. Insurers have taken two approaches to manage systematic mortality risks, namely self-insurance and risk transfer to purchasers of the annuity products. We demonstrate that self-insurance leads to high loadings, so that households offered a choice would favor the risk transfer scheme.

November 2011

Hospital workers are more likely than U.S. workers to be saving for retirement; 88% versus 59%, respectively. But only 48% of savers in the hospital sector have calculated how much they need to accumulate and only 22% are very confident that they are investing their retirement savings appropriately. Debt clearly hinders retirement preparations—89% of hospital workers with a major debt problem consider themselves behind in their planning and saving for retirement compared with 37% of those without a debt problem.

October 2011

Compared with U.S. workers in general, employees in the primary and secondary education sector tend to be more confident that they will have enough money to live comfortably throughout retirement. Greater confidence among K-12 employees results, at least in part, from higher participation rates in retirement plans at work. Individuals in the K-12 workforce are also more likely to be retirement savers. Nonetheless, 56% of all K-12 employees consider themselves behind schedule in planning and saving for retirement.

June 2011

Americans reaching traditional retirement ages during the past two decades and today face a different retirement environment than did prior cohorts of workers. In response to a very different environment, retirement patterns have changed dramatically since the mid 1980s. A century-long trend toward earlier and earlier retirement by American men has come to a halt, and has subsequently reversed. Among older women, there was a similar break in trend, and many older men and women are working today than the pre-1980s trends would have predicted.