W.F. Sharpe, Retirement Economics,
October 2005
(Slides from a presentation at the Pension and
Investments Defined Contribution 401(k) Conference)
Slides from a presentation arguing
that expected utility theory can lead to practical
implications for strategies and products designed for those
who have retired. In particular, theory suggests that some
retirees might desire to purchase an insurance product that
integrates an annuity with long-term care insurance to
provide payoffs not possible with separate purchases of
traditional annuities and long-term care insurance products.
A working paper designed
to provide a formal framework for finding the most
desirable post-retirement financial plan for an individual
or family.
Based
on a public lecture given at Middlebury College, Vermont. An
overview of the current status of retirement financing and
associated public policy issues.
A
working paper showing that in a complete market setting, any
post-retirement i nvestment and spending strategy can be
implemented by setting up a series of lockboxes, one for
each future year. Each box will have an initial amount of
money and an investment strategy to be followed until its
designated maturity year. At that point the investments are
liquidated and the proceeds spent. Such an approach allows a
retiree to act "in loco parentis" for his or her "future
self", which may provide some protection against financial
mistakes that could be made in later years.
A paper that contrasts the financial
economists' expected utility approach with rules of thumb
adopted by some practitioners. The analysis shows that some
popular rules are inconsistent with expected utility
maximization since they subject retirees to unavoidable
non-market risk. The paper also describes the lockbox
approach to retirement investing and spending.
An article by Bill Snyder describing
some of my work on Post-retirement economics