Retirement Investing: A New Approach

Bodie, Zvi

doi:10.2139/ssrn.260628

Abstract

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Retirement Investing: A New Approach

Zvi Bodie

Boston University - Department of Finance & Economics

February 2001

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

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.

Number of Pages in PDF File: 12

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

JEL Classification: D91, G11

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Date posted: February 19, 2001

Suggested Citation

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

Contact Information

Zvi Bodie (Contact Author)

Boston University - Department of Finance & Economics ( email )

595 Commonwealth Avenue
Boston, MA 02215
United States
617-353-4160 (Phone)
617-353 6667 (Fax)

HOME PAGE: http://smgnet.bu.edu/mgmt/profiles/BodieZvi.html