Abstract
Despite the importance of drawdown strategies under a defined contribution system with increased longevity risk, little guidance to retired and retiring members has been forthcoming from superannuation funds. This paper provides a do-it-yourself drawdown design for members of superannuation funds along with comparison studies on a range of retirement income strategies under an array of realistic scenarios. A stochastic economic scenario generator is used to simulate the uncertain outcomes of different drawdown strategies during retirement. The impact of annuitisation for mitigating longevity risk under government pension rules and the selection of personalised drawdown and annuitisation strategies for retirement are examined.
Original language | English |
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Article number | 101644 |
Number of pages | 10 |
Journal | Finance Research Letters |
Volume | 39 |
Early online date | 12 Jun 2020 |
DOIs | |
Publication status | Published - Mar 2021 |
Keywords
- Annuitisation
- Drawdown strategy
- Economic scenario generator
- Longevity risk
- Retirement income
- Superannuation