Means-Tested Public Pensions, Portfolio Choice and Decumulation in Retirement* Means-Tested Public Pensions, Portfolio Choice and Decumulation in Retirement.

• Autores: Hardy Hulley, Rebecca Mckibbin, Andreas Pedersen, SUSAN THORP
• Localización: Economic record, ISSN 0013-0249, Vol. 89, Nº. 284, 2013, págs. 31-51
• Idioma: inglés
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• Resumen

  • Age Pension means-testing buffers retired households against shocks to wealth and may influence decumulation patterns and portfolio allocations. Simulations from a simple model of optimal consumption and allocation strategies for a means-tested retired household indicate that, relative to benchmark, eligible and near-eligible households should optimally decumulate faster, and choose more risky portfolios, especially early in retirement. Empirical modelling of a Household, Income and Labour Dynamics in Australia panel of pensioner households confirms a riskier portfolio allocation by wealthier retired households. Poorer pensioner households decumulate at around 5 per cent p.a. on average; however, better-off households continue to add around 3 per cent p.a. to wealth, even when facing a steeper implicit tax rate on wealth.