Measuring Retirement Adequacy in a Dynamic Society

14 Pages Posted: 11 Sep 2020

See all articles by John R. Evans

John R. Evans

Centre for Analysis of Complex Financial Systems

Abdul Razeed

The University of Sydney

Date Written: August 1, 2020

Abstract

The determination of retirement adequacy is of interest to governments in setting policies related to government transfers, but different measures can result in different outcomes. This paper uses a broad definition of the components that contribute to retirement adequacy and shows that in aggregate, most countries’ retirees have a satisfactory replacement ratio but a 25% reduction in any of the components contributing to retirement adequacy could significantly change this outcome. The paper demonstrates the need for retirement adequacy determinations to be dynamic to adjust to changes in retirees’ environments, and for the need to adopt a retirement adequacy stress testing methodology when assessing retirement adequacy.

Keywords: Retirement adequacy, retirement replacement ratios, budgetary retirement standards

JEL Classification: G5, H5, I3

Suggested Citation

Evans, John R. and Razeed, Abdul, Measuring Retirement Adequacy in a Dynamic Society (August 1, 2020). Available at SSRN: https://ssrn.com/abstract=3665431 or http://dx.doi.org/10.2139/ssrn.3665431

John R. Evans (Contact Author)

Centre for Analysis of Complex Financial Systems ( email )

PO Box 363
Summer Hill, 2130
Australia

Abdul Razeed

The University of Sydney ( email )

University of Sydney
Sydney, NSW 2006
Australia

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