Work

Saving and Investing Over the Life Cycle and the Role of Collective Pension Funds

Year: 2007

Type: article

Abstract: This paper surveys the academic literature on optimal saving and investment over an individual’s life cycle. We start out with a simple benchmark model with separable and smooth preferences, one aggregate risk factor and riskless wage income. Within this simple setting, optimal saving and investment behavior are explored from the perspective of individuals. Subsequently, we investigate various constraints to optimal individual decision making. We discuss how collective pension schemes may help to relieve some of the market incompleteness that arises from these constraints while at the same time introducing new types of constraints. Finally, various extensions to the benchmark setting are analyzed: a more elaborate modelling of human capital, additional risk factors, and other types of preferences.

Source: De Economist

DOI: 10.1007/s10645-007-9070-1

Authors: Lans Bovenberg, Ralph Koijen, Theo Nijman, Coen Teulings

Institutions: Tilburg University, Network for Studies on Pensions, Aging and Retirement, University of Amsterdam

Language: English

Topic: Financial Literacy, Pension, Retirement Analysis

Subfield: Accounting

Field: Business, Management and Accounting

Domain: Social Sciences

Open Access status: hybrid

Estimated APC paid: $3,290

OpenAlex ID: W1988863129