Retirement Investing: A New Approach
Boston University - Department of Finance & Economics
Boston University School of Management Working Paper No. 2001-03
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
Date posted: February 19, 2001