Optimal Retirement Saving and Dissaving
Abstract
Abstract Applying a rich model of individuals’ life-cycle utility maximization, I comprehensively evaluate retirement saving plans. Across a range of individual characteristics, access to basic plans with constant expected payouts and no or full annuitization leads to individual utility gains of up to 5.07% of initial wealth and lifetime income ($43,800 in present value terms), and almost all individuals prefer full annuitization and a target-date fund investment strategy. With flexible plans allowing for partial annuitization and non-constant expected payouts, utility gains go up to 5.81%, and most individuals prefer a high degree of annuitization and expected payouts being increasing through retirement.
Fields of Study & Subjects
Financial Literacy
Pension
Retirement Analysis
Retirement
Disability
and Employment
Insurance
Mortality
Demography
Risk Management
Publication details
- Journal / source
- Journal of Financial and Quantitative Analysis
- Publisher
- Cambridge University Press (CUP)
- Volume
- 61
- Issue
- 7
- Pages
- 1–32
- Publication date
- 14 May 2026
- Language
- EN