This paper examines how workers allocated their contributions and assets in their employer-sponsored retirement savings plans within the TIAA system over the 2012 to 2018 period. Consistent with previous research, we find that Lifecycle funds, an auto-diversified target-date fund with an...

Assuming the loss aversion framework of Tversky and Kahneman (1992), stochastic investment and labour income processes, and a path-dependent fund target, we show that the optimal investment strategy for defined contribution pension plan members is a target-driven ‘threshold' strategy, whereby...

Assuming loss aversion, stochastic investment and labor income processes, and a path-dependent target fund, we show that the optimal investment strategy for defined contribution pension plan members is a target-driven 'threshold' strategy. With this strategy, the equity allocation is increased...