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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
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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

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