Abstract

http://ssrn.com/abstract=72608
 
 

References (5)



 
 

Citations (10)



 
 

Footnotes (7)



 


 



The Design and Production of New Retirement Savings Products


Zvi Bodie


Boston University - Department of Finance & Economics

Dwight B. Crane


Harvard Business School - Finance Unit

January 28, 1998

Harvard Business School Working Paper No. 98-070

Abstract:     
As pension plans in the U.S. and other countries shift from defined benefit to defined contribution plans, employees are being asked to bear investment risk formerly borne by employers and/or governments. Using a simulation model, this paper examines the performance of alternative investment strategies and products over the working life of a hypothetical employee. The results illustrate the uncertainty inherent in standard investment products and suggest the need for new products that would help employees manage investment risk. The paper explores the performance of investment products that provide a floor on the value of the worker's investment over some period of time, say five years, and also provide some share of the upside of the equity market. These products appear to work well; for example, workers who invest their annual retirement contributions in a series of five-year insured products appear to have a higher chance of achieving their retirement income target than if they were to invest the same amount in the S&P 500 index.

Number of Pages in PDF File: 18

JEL Classification: G1, G12, G14

working papers series





Download This Paper

Date posted: April 1, 1998  

Suggested Citation

Bodie, Zvi and Crane, Dwight B., The Design and Production of New Retirement Savings Products (January 28, 1998). Harvard Business School Working Paper No. 98-070. Available at SSRN: http://ssrn.com/abstract=72608 or http://dx.doi.org/10.2139/ssrn.72608

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
Dwight B. Crane (Contact Author)
Harvard Business School - Finance Unit ( email )
Boston, MA 02163
United States
617-495-6679 (Phone)
617-495-8103 (Fax)
Feedback to SSRN


Paper statistics
Abstract Views: 5,269
Downloads: 1,501
Download Rank: 5,947
References:  5
Citations:  10
Footnotes:  7

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo1 in 0.484 seconds