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Down the Retirement Risk Zone with Gun and Camera

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  • Geoffrey Kingston
  • Lance Fisher

Abstract

type="main" xml:id="ecpa12070-abs-0001"> The retirement risk zone represents a fragile period in the financial life cycle of people in defined-contributions superannuation. It primarily affects people of middle means. Sequencing risk has been described as an independent risk, but it has largely been a consequence of the dominant asset allocation strategy, described here as aggressive constant-mix. Lifetime glide paths should instead resemble a displaced V: the share of growth assets should fall by something like 20-50 percentage points over working life, then another 5 or 10 percentage points on the day of retirement, but should subsequently rise through retirement, by something like 20-30 percentage points.

Suggested Citation

  • Geoffrey Kingston & Lance Fisher, 2014. "Down the Retirement Risk Zone with Gun and Camera," Economic Papers, The Economic Society of Australia, vol. 33(2), pages 153-162, June.
    • Handle: RePEc:bla:econpa:v:33:y:2014:i:2:p:153-162
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    File URL: http://hdl.handle.net/10.1111/ecpa.2014.33.issue-2
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    References listed on IDEAS

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    1. Geoffrey Kingston, 2009. "Financial Plans for Baby Boomers: How Much Risk?," Economic Papers, The Economic Society of Australia, vol. 28(2), pages 65-74, June.
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    7. Merton, Robert C, 1969. "Lifetime Portfolio Selection under Uncertainty: The Continuous-Time Case," The Review of Economics and Statistics, MIT Press, vol. 51(3), pages 247-257, August.
    8. Ding, Jie & Kingston, Geoffrey & Purcal, Sachi, 2014. "Dynamic asset allocation when bequests are luxury goods," Journal of Economic Dynamics and Control, Elsevier, vol. 38(C), pages 65-71.
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    1. Andréasson, Johan G. & Shevchenko, Pavel V. & Novikov, Alex, 2017. "Optimal consumption, investment and housing with means-tested public pension in retirement," Insurance: Mathematics and Economics, Elsevier, vol. 75(C), pages 32-47.
    2. Jinhui Zhang & Sachi Purcal & Jiaqin Wei, 2017. "Optimal Time to Enter a Retirement Village," Risks, MDPI, vol. 5(1), pages 1-20, March.
    3. Adam Butt & M. Scott Donald & F. Douglas Foster & Susan Thorp & Geoffrey J. Warren & Tom Smith, 2017. "Design of MySuper default funds: influences and outcomes," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 57(1), pages 47-85, March.
    4. Geoffrey Kingston & Susan Thorp, 2019. "Superannuation in Australia: A Survey of the Literature," The Economic Record, The Economic Society of Australia, vol. 95(308), pages 141-160, March.

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