Annuity Planning and Consumption-Investment Choices in Retirement Planning
- Zhisheng Li 0, Aparna Gupta
- Corresponding Author
- Zhisheng Li
0Decision Sci. & Eng. Systems, Rensselaer Polytechnic Inst.
Available Online October 2006.
- https://doi.org/10.2991/jcis.2006.29How to use a DOI?
- Annuity; Annuitization;Consumption-investment selections;Utility; Optimization
- Annuities can be effective tools in managing longevity risk in retirement planning. This paper develops a framework that merges annuity purchase decisions with consumption-investment selections in retirement planning. After introducing a pricing model and a benefit payment model for an annuity, we construct a multi-period wealth evolution model. An optimization problem is formulated with an objective of maximizing life time utility of consumptions and wealth. Optimal decisions are determined as a trade off between consumption and investment among an annuity, a risky and a risk-free asset.
- Open Access
- This is an open access article distributed under the CC BY-NC license.
Cite this article
TY - CONF AU - Zhisheng Li AU - Aparna Gupta PY - 2006/10 DA - 2006/10 TI - Annuity Planning and Consumption-Investment Choices in Retirement Planning BT - 9th Joint International Conference on Information Sciences (JCIS-06) PB - Atlantis Press SN - 1951-6851 UR - https://doi.org/10.2991/jcis.2006.29 DO - https://doi.org/10.2991/jcis.2006.29 ID - Li2006/10 ER -