Robert Keng Heong Lian, Emiliano A. Valdez and Chan Kee Low
Abstract
A measure of level of post-retirement standard of living is the replacement ratio, i.e., percentage of final salary received as annual retirement income derived from savings. The replacement ratio depends on many factors including salary, salary increases, investment returns, and post-retirement mortality. Elementary life contingencies techniques are used to develop a replacement ratio formula and analyze its sensitivity to these factors.
Key words and phrases: retirement planning, savings, interest rates, life annuity, social security.
Robert Keng Heong Lian
Division of Actuarial Science and Insurance,
Nanyang Business School
Nanyang Technological University,
Singapore 639798
Emiliano A. Valdez
Division of Actuarial Science and Insurance,
Nanyang Business School
Nanyang Technological University,
Singapore 639798
Chan Kee Low
Division of Actuarial Science and Insurance,
Nanyang Business School
Nanyang Technological University,
Singapore 639798
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