Hostname: page-component-cd9895bd7-q99xh Total loading time: 0 Render date: 2024-12-26T19:02:13.914Z Has data issue: false hasContentIssue false
  • English
  • Français

Family Fortunes — A Guide to Saving for Retirement

Published online by Cambridge University Press:  10 June 2011

D. R. Cooper
D. R. Cooper
Affiliation:
William M. Mercer Ltd., 38-40 Trinity Square, London EC3N 4DJ, U.K., Tel: +44(0)20-7977-8684, Fax: +44(0)20-7977-8892, Email: Deborah.R.Cooper@uk.wmmercer.com
Get access Rights & Permissions [Opens in a new window]

Abstract

The paper investigates the level and incidence of saving required in order to maintain the standard of living that a household experiences whilst of working age into retirement. In order to do this, a model has been constructed that follows the income and expenditure of a household, allowing for tax and social security, as well as changing family circumstances. The model can be used to explain how a household should save in order to achieve a given standard of living in retirement.

The author concludes that the usual message, to save a fixed proportion of income throughout a working lifetime, is at best not helpful and at worst could lead to a lower standard of living over the household's lifetime. People can and should manage the timing of their saving and borrowing in order to achieve optimum incomes.

Keywords

SavingPensionsFinancial PlanningMeans Test
Type
Sessional meetings: papers and abstracts of discussions
Information
British Actuarial Journal , Volume 8 , Issue 5 , 01 December 2002 , pp. 849 - 885
Copyright
Copyright © Institute and Faculty of Actuaries 2002

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Cook, M. & Johnson, P. (2000). Saving for retirement: how taxes and charges affect choice. FSA Occasional Paper Series 8. http://www.fsa.gov.uk/pubs/occpapers/op08.pdfGoogle Scholar
FSA (2000). FSA factsheet: stakeholder pensions and decision trees. http://www.fsa.gov.uk/pubs/public/cred27ap.pdfGoogle Scholar
Feldstein, M. (1987). Should social security be means tested? Journal of Political Economy, 95, 3, 468–484.CrossRefGoogle Scholar
Friedberg, L. (1999). The labor supply effects of the Social Security Earnings Test. NBER working paper No. W7200.CrossRefGoogle Scholar
Hamilton, M. (2000). Retirement saving strategies for Canadians. CIA National Symposium on Ageing.Google Scholar
Hauser, R. (1997). Adequacy and poverty among the retired. AWP3.2, OECD.Google Scholar
Le Grys, D.J. et al. (2001). Report on equity release mechanisms. http://www.actuaries.org.uk/equity_release/rpt.pdfGoogle Scholar
Murphy, M. & Wang, D. (1999). Forecasting British families into the twenty-first century. In Changing Britain: families and households in the 1990s. Ed: McRae, S, Oxford University Press.Google Scholar
NAPF (2000). Annual survey 2000. National Association of Pension Funds.Google Scholar
NatWest (1999). NatWest pensions index. Vol. IV, National Westminster Life Assurance Limited.Google Scholar
ONS (1999). Family spending, 1998–99. London: HMSO.Google Scholar
Pension Forecasting Advisory Group (PFAG) (2000). Planning your future. http://www.dss.gov.uk/publications/dss/2000/penfor/penfor.pdfGoogle Scholar
Sinclair, P.J.N. (1998). Why do the poor save so little? Discussion paper 20/98, Department of Economics, University of Birmingham.Google Scholar