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Article: Research Update: How do retirement ages depend on stock market returns?(Industry Overview)
- Article from:
- epn: European Pensions & Investment News
- Article date:
- February 17, 2003
CopyrightCOPYRIGHT 2003 FT Business. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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The rapid increases and declines in the stock market in the past couple of years have had a clear and direct impact on retirement incomes of those near retirement age who are heavily dependent on defined contribution pensions. Do individuals who face such a dramatic change in realisable retirement income adjust their consumption or instead adjust their retirement age?
Theory suggests a bit of both. Professors Zvi Bodie and William Samuelson of Boston University, along with Robert Merton of Harvard Business School, argued back in 1992 that individuals will invest more in equity because they have a choice over when to retire. If markets perform better than ...