After 70 Years of Fruitful Research, Why Is There Still a Retirement Crisis?

Laurence Uncategorized

Even in 1797, the 22-year-old author Jane Austen, patron saint of annuitants, understood why issuers of lifelong income promises might be unhappy about their side of the deal and why beneficiaries of such income guarantees are presumably happier. Austen understood time risk and longevity risk—the principal risks that individuals saving for retirement should be concerned about—better than most of today’s would-be retirees and some of today’s economists. Clearly, the problem of saving and investing for retirement is not new; neither are some of the solutions.

Yet, today—more than two centuries later and despite thousands of scholarly and practical articles (many of which have appeared in the Financial Analysts Journal over the years) and much earnest effort by researchers, financial product designers, pension plan sponsors, advisers, legislators, regulators, and individual investors—we still have a retirement crisis.

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