DISCUSSION PAPER PI-0105
Retirement Investing: A New Approach
This paper proposes a new approach to investing for retirememt that takes
advantage of recent market innovations and advances in finance theory to
improve the risk/reward opportunities available to individual investors before
and after retirement. The approach introduces three new elements:
- It uses inflation-protected bonds to hedge a minimum standard of living after retirement.
- It takes account of a person's willingness to postpone retirement.
- It uses option "ladders" to lever growth in retirement income.