Spend more today: Using behavioural economics to improve retirement expenditure decisions

This paper examines how behavioural economics can be used to improve the expenditure decisions of retirees. It identifies how accumulated assets can be used optimally throughout retirement to produce life-long income when required, to make provision for contingencies – such as unanticipated spikes in expenditure – and to optimize the size and timing of bequests. We do this using a SPEEDOMETER (or Spending Optimally Throughout Retirement) retirement expenditure plan which employs defaults within a choice architecture. At its simplest, the plan involves just four key behavioural nudges: (1) First, make a plan – ideally with, but if necessary without, an adviser; (2) automatic phasing of annuitization which is designed to tackle the aversion to large irreversible transactions and losing control of assets and so allows the greatest possible degree of flexibility in managing the run-down of retirement assets; (3) capital protection in the form of ‘money-back’ annuities which deals with loss aversion, i.e., the fear of losing your money if you die early; and (4) the slogan ‘spend more today’ which utilizes hyperbolic discounting to satisfy the human trait of wanting jam today and to reinforce the idea that ‘buying an annuity is a smart thing to do’.Behavioural economics; Retirement; Annuities

Sharing longevity risk: Why governments should issue longevity bonds

Government-issued longevity bonds would allow longevity risk to be shared efficiently and fairly between generations. In exchange for paying a longevity risk premium, the current generation of retirees can look to future generations to hedge their aggregate longevity risk. There are also wider social benefits. Longevity bonds will lead to a more secure pension savings market - both defined contribution and defined benefit - together with a more efficient annuity market resulting in less means-tested benefits and a higher tax take. The emerging capital market in longevity-linked instruments can get help to kick start market participation through the establishment of reliable longevity indices and key price points on the longevity risk term structure and can build on this term structure with liquid longevity derivatives.Longevity Risk; Longevity Bonds; Public Policy; Political Economy

Audio Link 13.1

Tom Boardman recalls two instances of Corporal Leo Britt\u27s working with POW actors: his disregard of rank in dealing with officer-actors, and his patience in dealing with actors whose minds had been dulled by long incarceration. This audio and video clip is part of Professor Sears Eldredge’s investigation of the musical and theatrical performances that occurred in Japanese prisoner of war camps in Southeast Asia during World War II

Audio Link 11.2

Tom Boardman sings Please don\u27t talk about me when I\u27m gone while playing his camp-made ukulele. This audio and video clip is part of Professor Sears Eldredge’s investigation of the musical and theatrical performances that occurred in Japanese prisoner of war camps in Southeast Asia during World War II

Spend more today: Using behavioural economics to improve retirement expenditure decisions

This paper examines how behavioural economics can be used to improve the expenditure decisions of retirees. It identifies how accumulated assets can be used optimally throughout retirement to produce life-long income when required, to make provision for contingencies – such as unanticipated spikes in expenditure – and to optimize the size and timing of bequests. We do this using a SPEEDOMETER (or Spending Optimally Throughout Retirement) retirement expenditure plan which employs defaults within a choice architecture. At its simplest, the plan involves just four key behavioural nudges: (1) First, make a plan – ideally with, but if necessary without, an adviser; (2) automatic phasing of annuitization which is designed to tackle the aversion to large irreversible transactions and losing control of assets and so allows the greatest possible degree of flexibility in managing the run-down of retirement assets; (3) capital protection in the form of ‘money-back’ annuities which deals with loss aversion, i.e., the fear of losing your money if you die early; and (4) the slogan ‘spend more today’ which utilizes hyperbolic discounting to satisfy the human trait of wanting jam today and to reinforce the idea that ‘buying an annuity is a smart thing to do’

Spend more today: Using behavioural economics to improve retirement expenditure decisions

This paper examines how behavioural economics can be used to improve the expenditure decisions of retirees. It identifies how accumulated assets can be used optimally throughout retirement to produce life-long income when required, to make provision for contingencies – such as unanticipated spikes in expenditure – and to optimize the size and timing of bequests. We do this using a SPEEDOMETER (or Spending Optimally Throughout Retirement) retirement expenditure plan which employs defaults within a choice architecture. At its simplest, the plan involves just four key behavioural nudges: (1) First, make a plan – ideally with, but if necessary without, an adviser; (2) automatic phasing of annuitization which is designed to tackle the aversion to large irreversible transactions and losing control of assets and so allows the greatest possible degree of flexibility in managing the run-down of retirement assets; (3) capital protection in the form of ‘money-back’ annuities which deals with loss aversion, i.e., the fear of losing your money if you die early; and (4) the slogan ‘spend more today’ which utilizes hyperbolic discounting to satisfy the human trait of wanting jam today and to reinforce the idea that ‘buying an annuity is a smart thing to do’

Numerably Contractible Spaces

Numerably contractible spaces play an important role in the theory of homotopy pushouts and pullbacks. The corresponding results imply that a number of well known weak homotopy equivalences are genuine ones if numerably contractible spaces are involved. In this paper we give a first systematic investigation of numerably contractible spaces. We list the elementary properties of the category of these spaces. We then study simplicial objects in this category. In particular, we show that the topological realization functor preserves fibration sequences if the base is path-connected and numerably contractible in each dimension. Consequently, the loop space functor commutes with realization up to homotopy. We give simple conditions which assure that free algebras over a topological operad are numerably contractible.Comment: 24 page

Sharing longevity risk: Why governments should issue longevity bonds

Government-issued longevity bonds would allow longevity risk to be shared efficiently and fairly between generations. In exchange for paying a longevity risk premium, the current generation of retirees can look to future generations to hedge their aggregate longevity risk. There are also wider social benefits. Longevity bonds will lead to a more secure pension savings market - both defined contribution and defined benefit - together with a more efficient annuity market resulting in less means-tested benefits and a higher tax take. The emerging capital market in longevity-linked instruments can get help to kick start market participation through the establishment of reliable longevity indices and key price points on the longevity risk term structure and can build on this term structure with liquid longevity derivatives

On the Bergman-Milton bounds for the homogenization of dielectric composite materials

The Bergman-Milton bounds provide limits on the effective permittivity of a composite material comprising two isotropic dielectric materials. These provide tight bounds for composites arising from many conventional materials. We reconsider the Bergman-Milton bounds in light of the recent emergence of metamaterials, in which unconventional parameter ranges for relative permittivities are encountered. Specifically, it is demonstrated that: (a) for nondissipative materials the bounds may be unlimited if the constituent materials have relative permittivities of opposite signs; (b) for weakly dissipative materials characterized by relative permittivities with real parts of opposite signs, the bounds may be exceedingly large

One-connectivity and finiteness of Hamiltonian S1S^1-manifolds with minimal fixed sets

Let the circle act effectively in a Hamiltonian fashion on a compact symplectic manifold $(M, \omega)$. Assume that the fixed point set $M^{S^1}$ has exactly two components, $X$ and $Y$, and that $\dim(X) + \dim(Y) +2 = \dim(M)$. We first show that $X$, $Y$ and $M$ are simply connected. Then we show that, up to $S^1$-equivariant diffeomorphism, there are finitely many such manifolds in each dimension. Moreover, we show that in low dimensions, the manifold is unique in a certain category. We use techniques from both areas of symplectic geometry and geometric topology