This paper offers an explanation for the puzzle of low wealth holdings among a significant fraction of the elderly. Instead of invoking irrational, non-rational, or non-optimal behavior to resolve the puzzle, it is shown that widespread low wealth holdings are consistent with a rational...

This note presents a very simple method for deriving the necessary optimality conditions for optimal control of jump (point) processes. By means of Bellman's principle of optimality, the original stochastic control problem is transformed into a simple optimization problem. The derivation is...