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Wharton-SMU Research Centre
Guest Speaker:
Olivia S. Mitchell
International Foundation of Employee Benefit Plans Professor; Professor of Insurance and Risk Management and Business and Public Policy, The Wharton School, University of Pennsylvania
Date & Venue:
Date: 6 June 2007, Wednesday
Time: 5.00pm-6.30pm (a light buffet dinner will be served after the presenation)
Venue: Conference Hall 1, Level 5, Administration Building
Singapore Management University
81 Victoria Street, Singapore 188065
(Location Map)
Topic:
Abstract:
Retirees confront the difficult problem of how to manage their money in retirement so as to not outlive their funds while continuing to invest in capital markets. We posit a dynamic utility maximizer who makes both asset location and allocation decisions when managing her retirement financial wealth and annuities, and we prove that she can benefit from both the equity premium and longevity insurance in her retirement portfolio. Even without bequests, she will not fully annuitize; rather, her optimal stock allocation amounts initially to more than half of her financial wealth and declines with age. Welfare gains from this strategy can amount to 40 percent of financial wealth (depending on risk parameters and other resources). In practice, it turns out that many retirees will do almost as well by purchasing a variable annuity invested 60/40 in stocks/bonds.
Registration:
Admission is on first-come-first-served. Please register early for this free seminar to avoid disappointment.
To register, please click here
Enquiries:
Ms. Lim Lih Yeng
Email: lylim@smu.edu.sg, Tel: 6828-0197
Ms. Priscilla Cheng
Email: priscillacheng@smu.edu.sg, Tel: 6828-0383
Ms. Rozana Bte Osman
Email: rozanaosman@smu.edu.sg, Tel: 6828-0802
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