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Life-Cycle Finance and the Design of Pension Plans

  • Zvi Bodie
  • Jérôme Detemple
  • Marcel Rindisbacher

    ()

    (School of Management, Boston University, Boston, Massachusetts 02215)

This article reviews recent scientific literature on consumer financial decisions over the life cycle, outlining its implications for the design of pension plans. It begins with a review of advances in the theory of rational financial planning and wealth management. It then summarizes the recent empirical literature on the actual behavior of households regarding saving, investing, and insuring their consumption in old age. Finally, it briefly comments on the practical implications of the theory for the design of pension systems and outlines areas of future research.

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File URL: http://www.annualreviews.org/doi/abs/10.1146/annurev.financial.050708.144317
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Article provided by Annual Reviews in its journal Annual Review of Financial Economics.

Volume (Year): 1 (2009)
Issue (Month): 1 (November)
Pages: 249-286

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Handle: RePEc:anr:refeco:v:1:y:2009:p:249-286
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