Reducing Social Security PRA Risk at the Individual Level

Joshua Rauh, Steven F. Venti and David A. Wise

Edited by James M. Poterba

in Social Security Policy in a Changing Environment

Published by University of Chicago Press

Published in print June 2009 | ISBN: 9780226076485
Published online February 2013 | e-ISBN: 9780226076508 | DOI:
Reducing Social Security PRA Risk at the Individual Level

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This chapter explores the implications for asset accumulation of different investment strategies. In a Social Security system with a personal retirement account (PRA) component, retirement savers would have to decide how to allocate their PRA portfolios across a broad range of asset classes and financial products. Asset allocation decisions have important consequences for retirement wealth accumulation because they affect the expenses of investing as well as the risk of low returns. The goal of this study is to assess the relative risk associated with alternative asset allocation strategies in PRAs, though it also offers insight on the consequences of different asset allocation rules in 401(k)-type plans.

Keywords: Social Security; PRA; personal retirement account; retirement; No Lose allocation strategy

Chapter.  16733 words.  Illustrated.

Subjects: Public Economics

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