Download This PaperBalancing Longevity Risk and Market Risk In Target Date Funds
7 Pages Posted: 6 Oct 2010
Date Written: October 1, 2010
Abstract
There are two basic types of risk that investors try to balance when saving for retirement: longevity risk and market risk. Using an asset-liability framework, we demonstrate how creating a defined contribution plan that encourages participants to contribute early, contribute increasing amounts, and invest in a target date fund with a conservative glide path helps achieve a balance of these two types of risk.
Keywords: Defined Contribution Plans, Glide Paths, Pension Fund, Target Date Funds
Suggested Citation: Suggested Citation
Jacobsen, Brian and Chan, Christian and Barbee, Olivia, Balancing Longevity Risk and Market Risk In Target Date Funds (October 1, 2010). Rotman International Journal of Pension Management, Vol. 3, No. 2, 2010, Available at SSRN: https://ssrn.com/abstract=1687771
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