Retirement Investing: A New Approach

Bodie, Zvi

doi:10.2139/ssrn.260628

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Retirement Investing: A New Approach

Boston University School of Management Working Paper No. 2001-03

12 Pages Posted: 19 Feb 2001

See all articles by Zvi Bodie

Zvi Bodie

Boston University

Date Written: February 2001

Abstract

This paper proposes a new approach to investing for retirement that takes advantage of recent market innovations and advances in finance theory to improve the risk/reward opportunities available to individual investors before and after retirement. The approach introduces three new elements:

- It uses inflation-protected bonds to hedge a minimum standard of living after retirement.

- It takes account of a person's willingness to postpone retirement.

- It uses option "ladders" to lever growth in retirement income.

Keywords: Inflation-protected bonds, flexible retirement, option ladders

JEL Classification: D91, G11

Suggested Citation: Suggested Citation

Bodie, Zvi, Retirement Investing: A New Approach (February 2001). Boston University School of Management Working Paper No. 2001-03, Available at SSRN: https://ssrn.com/abstract=260628 or http://dx.doi.org/10.2139/ssrn.260628