How much risk is acceptable?

Munnell, Alicia Haydock, Anthony Webb, and Alex Golub-Sass. “How much risk is acceptable?”. Issue in Brief 8-20, Chestnut Hill, Mass.: Center for Retirement Research at Boston College, November 2008. http://hdl.handle.net/2345/bc-ir:104318.
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Abstract

The brief's key findings are: (1) The financial crisis suggests the need for a new universal tier of retirement saving to supplement Social Security and 401(k)s. (2) If the tier were a defined contribution system, asset levels would vary with market returns and payouts with interest rates. (3) Replacement rates would fluctuate as much as 25 percentage points – even if everyone invested in an identical target-date fund. (4) An alternative is to guarantee a fixed return, but this return will almost always be lower than that under target-date fund, and guarantees are not costless.

Title
How much risk is acceptable?
Author
Munnell, Alicia Haydock
Webb, Anthony
Golub-Sass, Alex
School
Carroll School of Management
Discipline
Finance
Center
Center for Retirement Research
Genre
report
Date Issued
November 2008
Publisher
Center for Retirement Research at Boston College
Series Title
Issue in Brief
Series Number
8-20
Version Identification
Version of record.
Persistent Link
http://hdl.handle.net/2345/bc-ir:104318
Use Restrictions
These materials are made available for use in research, teaching and private study, pursuant to U.S. Copyright Law. The user must assume full responsibility for any use of the materials, including but not limited to, infringement of copyright and publication rights of reproduced materials. Any materials used for academic research or otherwise should be fully credited with the source. The publisher or original authors may retain copyright to the materials.
Subject
Financing Retirement

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