Advances in Retirement Investing

Individuals need to rely on their own saving and investment choices during accumulation. Financial engineering and risk management techniques can help them in these complex decisions, such as retirement bonds, investment strategies, and risk insurance techniques.

Format: Paperback / softback
Length: 75 pages
Publication date: 10 September 2020
Publisher: Cambridge University Press

Individuals must rely on their own saving and investment choices during accumulation to supplement replacement income provided by Social Security and employer-sponsored pension plans. Once retired, they must also decide at which rate to spend their savings, with the usual dilemma between present and future consumption in mind. This Element explains how financial engineering and risk management techniques can help them in these complex decisions.

First, retirement bonds, or retirement bond replicating portfolios, are introduced that provide stable and predictable replacement income during the decumulation period. Second, investment strategies are described that combine the retirement bond with an efficient performance-seeking portfolio to reduce uncertainty over the future amount of income while offering upside potential. Finally, strategies using risk insurance techniques are proposed to secure minimum levels of replacement income while giving the possibility of reaching higher levels of income.

By leveraging financial engineering and risk management techniques, individuals can make informed decisions about their retirement savings and investment strategies. Retirement bonds and retirement bond replicating portfolios provide stable income during the decumulation period, while investment strategies combining the retirement bond with a performance-seeking portfolio can reduce uncertainty and offer upside potential. Risk insurance techniques can help secure minimum levels of replacement income while providing the opportunity for higher income levels.

In conclusion, financial engineering and risk management techniques play a crucial role in helping individuals navigate the complex decisions related to retirement savings and investment. By understanding the benefits of retirement bonds, investment strategies, and risk insurance techniques, individuals can optimize their retirement income and achieve their financial goals.

Weight: 246g
Dimension: 153 x 228 x 14 (mm)
ISBN-13: 9781108926621