Publications & Presentations
Title
A new strategy to guarantee retirement income using TIPS and longevity insurance: A second look
Document Type
Article
Publication Date
Winter 2015
Abstract
Shankar (2009) proposes a new investment strategy for retirees that bundles Treasury Inflation Protected Securities with a deferred annuity to guarantee real annual withdrawal rates of 5% or more with no risk of financial ruin. This strategy addresses three problems that retirees face: longevity risk, inflation risk, and liquidity risk inherent in the purchase of an immediate annuity. In our article, we evaluate the performance of this proposed strategy under realistic assumptions about costs, security design, and markets. In addition, we evaluate how the bequest motive might affect the choice between Shankar's strategy and an immediate annuity. © 2015 Academy of Financial Services. All rights reserved.
Recommended Citation
Haensly, P. J., PhD., & Pai, K. P. (2015). A new strategy to guarantee retirement income using TIPS and longevity insurance: A second look. Financial Services Review, 24(4), 359-386. Retrieved from http://ezproxy.utpb.edu/login?url=https://www.proquest.com/scholarly-journals/new-strategy-guarantee-retirement-income-using/docview/1734846957/se-2?accountid=7137