Life-Cycle Finance and the Design of Pension Plans

Posted: 4 Jun 2010  

Zvi Bodie

Boston University - Department of Finance & Economics

Jerome Detemple

Boston University - Department of Finance & Economics; Center for Interuniversity Research and Analysis on Organization (CIRANO)

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Date Written: December 2009

Abstract

This article reviews recent scientific literature on consumer financial decisions over the life cycle, outlining its implications for the design of pension plans. It begins with a review of advances in the theory of rational financial planning and wealth management. It then summarizes the recent empirical literature on the actual behavior of households regarding saving, investing, and insuring their consumption in old age. Finally, it briefly comments on the practical implications of the theory for the design of pension systems and outlines areas of future research.

Suggested Citation

Bodie, Zvi and Detemple, Jerome, Life-Cycle Finance and the Design of Pension Plans (December 2009). Annual Review of Financial Economics, Vol. 1, pp. 249-286, 2009. Available at SSRN: https://ssrn.com/abstract=1599378 or http://dx.doi.org/10.1146/annurev.financial.050708.144317

Zvi Bodie (Contact Author)

Boston University - Department of Finance & Economics ( email )

United States

HOME PAGE: http://www.zvibodie.com

Jerome Detemple

Boston University - Department of Finance & Economics ( email )

595 Commonwealth Avenue
Boston, MA 02215
United States
(617) 353-4297 (Phone)
(617) 353 6667 (Fax)

Center for Interuniversity Research and Analysis on Organization (CIRANO)

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Montreal, Quebec H3C 3J7
Canada

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