TY - JOUR
T1 - Investment strategies in retirement
T2 - In the presence of a means-tested government pension
AU - Butt, Adam
AU - Deng, Ziyong
PY - 2012/4
Y1 - 2012/4
N2 - A simulation approach is used to investigate how various investment strategies affect the ability of retirees to spend at a desired level up until death. Retirees are assumed to maintain all investment and longevity risk, and also have access to a government-sponsored and means-tested Age Pension to provide part of their desired expenditure. It is found that a 100% allocation to growth assets is optimal for large expenditure desires relative to initial balance levels, with allocations outside of this being sensitive to movements in initial balance and desired expenditure level, as well as interactions with the Age Pension.
AB - A simulation approach is used to investigate how various investment strategies affect the ability of retirees to spend at a desired level up until death. Retirees are assumed to maintain all investment and longevity risk, and also have access to a government-sponsored and means-tested Age Pension to provide part of their desired expenditure. It is found that a 100% allocation to growth assets is optimal for large expenditure desires relative to initial balance levels, with allocations outside of this being sensitive to movements in initial balance and desired expenditure level, as well as interactions with the Age Pension.
UR - http://www.scopus.com/inward/record.url?scp=84857825149&partnerID=8YFLogxK
U2 - 10.1017/S1474747211000291
DO - 10.1017/S1474747211000291
M3 - Article
SN - 1474-7472
VL - 11
SP - 151
EP - 181
JO - Journal of Pension Economics and Finance
JF - Journal of Pension Economics and Finance
IS - 2
ER -