Journal of Financial and Quantitative Analysis 2026
Optimal Retirement Saving and Dissaving
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.
- DOI
- 10.1017/s0022109026102968
- Pages
- 1-32
- Language
- en
- Sources
- openalex crossref