This article contributes to a better understanding of the risks involved in a life annuity investment. We examine the distribution of weighted annuity benefits and assess various measures of dispersion such as the coefficient of variance. In particular, we quantify the standard deviation about...

What is the socially optimal level of liquidity in a retirement savings system? Liquid retirement savings are desirable because liquidity enables agents to flexibly respond to pre-retirement events that raise the marginal utility of consumption. On the other hand, pre-retirement liquidity is...

What is the socially optimal level of liquidity in a retirement savings system? Liquid retirement savings are desirable because liquidity enables agents to flexibly respond to pre-retirement events that raise the marginal utility of consumption. On the other hand, pre-retirement liquidity is...

It is well established that consumption is “hump” shaped over an individual's lifecycle, peaking in middle age and then declining in the years that follow. Prior research has documented that consumption declines at retirement, which is inconsistent with the standard lifecycle model with...