There's no time like the present

Authors

  • Alistair Byme Department of Accounting and Finance, University of Strathclyde, Glasgow
  • David Blake bThe Pensions Institute, Cass Business School, London
  • Andrew Caims Department of Actuarial Science & Statistics, Heriot-Watt University, Edinburgh
  • Kevin Dowd Centre for Risk and Insurance Studies, Nottingham University Business School, Nottingham

DOI:

https://doi.org/10.61190/fsr.v15i3.4859

Keywords:

Stochastic simulation, Defined contribution, Retirement saving

Abstract

Many people delay joining a pension plan until well into their working lives. We use a stochastic simulation model to show the cost of this delay in terms of the higher pension contributions that must eventually be paid to ensure an adequate retirement income. We find the levels of contributions required for individuals who start saving late are so high it is questionable whether they are affordable for anyone not on a high income. We also analyze the cost in terms of reduced pension of an interrupted labor market history, such as that experienced by someone who leaves work for a period to bring up a family.

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Published

2006-09-30

Issue

Vol. 15 No. 3 (2006): FSR Fall 2006

Section

New Original Submission

License

Copyright (c) 2006 Academy of Financial Services

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This license allows the author to remix, tweak, and build upon the original work non-commercially. The new work(s) must be non-commercial and acknowledge the original work.

How to Cite

There’s no time like the present. (2006). Financial Services Review, 15(3), 213-231. https://doi.org/10.61190/fsr.v15i3.4859