Abstract

http://ssrn.com/abstract=318840
 
 

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Retirement Annuity Design in an Inflationary Climate


Zvi Bodie


Boston University - Department of Finance & Economics

James E. Pesando


University of Toronto; National Bureau of Economic Research (NBER)

September 1986

NBER Working Paper No. w0896

Abstract:     
This paper examines the tilt and risk-return characteristics of real retirement incomes provided by variable annuities tied to bills, long-term bonds, stocks and a mixed portfolio which combines all three. The analysis emphasizes the riskiness of the real value of benefits provided by conventional nominal annuities. The Rockefeller Foundation Plan, together with the "ad hoc" cost-of-living adjustments made by many large firms, are interpreted as representative market responses to increased inflation uncertainty. The paper examines the annuity designs implicit in these innovations, and shows them to be variants of the standard variable annuity.

Number of Pages in PDF File: 47

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Date posted: June 28, 2004  

Suggested Citation

Bodie, Zvi and Pesando, James E., Retirement Annuity Design in an Inflationary Climate (September 1986). NBER Working Paper No. w0896. Available at SSRN: http://ssrn.com/abstract=318840

Contact Information

Zvi Bodie
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
James E. Pesando (Contact Author)
University of Toronto ( email )
Department of Economics Institute for Policy Analysis
Toronto, Ontario M5S 3E6
Canada
(416)978-8625 (Phone)
(416)978-5519 (Fax)
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
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