Investment strategies in retirement

in the presence of a means-tested government pension

Adam Butt, Ziyong Deng

    Research output: Contribution to journalArticle

    5 Citations (Scopus)

    Abstract

    A simulation approach is used to investigate how various investment strategies affect the ability of retirees to spend at a desired level up until death. Retirees are assumed to maintain all investment and longevity risk, and also have access to a government-sponsored and means-tested Age Pension to provide part of their desired expenditure. It is found that a 100% allocation to growth assets is optimal for large expenditure desires relative to initial balance levels, with allocations outside of this being sensitive to movements in initial balance and desired expenditure level, as well as interactions with the Age Pension.
    Original languageEnglish
    Pages (from-to)151-181
    Number of pages31
    JournalJournal of Pension Economics and Finance
    Volume11
    Issue number2
    DOIs
    Publication statusPublished - 2012

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