-cycle (or target date) funds. We find that life-cycle funds designed to match the risk tolerance and investment horizon of … investors have small welfare costs. All other choices, including life-cycle funds which do not match investors' risk tolerance …

-cycle (or target date) funds. We find that life-cycle funds designed to match the risk tolerance and investment horizon of … investors have small welfare costs. All other choices, including life-cycle funds which do not match investors' risk tolerance …

(2005). We extend it by unemployment risk using Markov chains to model the transition between different employment states … systems as those established in the EU are able to offset the negative impact of unemployment risk on the portfolio … persistence. -- Precautionary savings ; unemployment insurance ; long-term unemployment ; income uncertainty …