The Maurer Report
It’s not every day that I read something and say to myself as I read almost every line “Yep! I agree with that.” “And that!” “And that too.” But I just read something that had precisely that effect on me.
There was a conference just held over in Brussels that was all about securing better outcomes for future retirees. Someone called Professor Raimond Maurer and his colleague Barbara Somova of Goethe University in Frankfurt presented a paper to demonstrate that the idea of forcing people to buy annuities at the age of, say, 65 is way out of date.
In a nutshell the authors say that as people these days can expect to live for possibly twenty or even thirty years in retirement they would be better off if they could “keep a balanced asset allocation of their pension savings, at least for an extended period after retirement.”
The report goes on to say that it is “widely recognised that households wish to provide their surviving relatives with an inheritance and build a financial buffer to cope with the risk associated with critical illness.”
I’ve always been of the view that the assumption that all of us will have the same needs in retirement (an income from our mid-sixties) is unhelpful. We’re treated as individuals when we’re saving our money; we should be treated as individuals when we’re spending our life savings too. To me it seems self-evident that the more control people have over their pension savings, the more likely they are to accumulate them in the first place.
I enjoyed reading this report; maybe you would to. There’s a link here to it if you’d like to see it (although it’s quite a big file and will take a while to download): : http://www.efama.org/index.php?option=com_docman&task=doc_download&gid=871
18 February 2009
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