willing to take some risk, investments in the stock market could increase their economic preparation for retirement, and …, indeed, economic theory as well as the typical advice of financial advisors calls for stock market investments. Yet, the rate … of stock holding is much below what theory suggests it should be, undoing any benefit associated with the greater control …

longevity risk, and partially-refundable premiums. Welfare rises since policyholders exercise the product's flexibility by …

mortality risk. In addition to stocks and bonds, households also have access to incomplete annuity markets offering a hedge … against mortality risk. We show that a considerable fraction of wealth should be annuitized to skim the return enhancing … mortality credit. The remaining liquid wealth (stocks and bonds) is used to hedge labor income risk during work life, to earn …

separating parameters that now reflect both risk aversion and time preference. We explore a number of barriers to developing a … parameter for risk aversion can restore plausible retirement behavior, but the pattern of stock holdings is too high, especially … at younger ages, for plausible values of the risk aversion parameter. At the moment, no easy solution is at hand to this …

withdrawal strategy, assuming risk aversion, stochastic capital markets, and uncertain lifetimes. The resulting portfolio … retirees across a wide range of risk preferences, supporting financial planning advisors who often recommend this rule. We then … death." As risk aversion rises, annuities first crowd out bonds in retiree portfolios; at higher risk aversion still …