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Needed, Now: New Approaches to Financing Old Age
Following the global financial crisis, troubled retirement systems around the world face new challenges that may result in sharply reduced income for retirees -- as well as the possibility that younger workers will need to work much longer, according to Wharton insurance and risk management professor Olivia S. Mitchell. In a recent paper titled, "Implications of the Financial Crisis for Long Run Retirement Security," Mitchell, who is director of Wharton's Pension Research Council, outlines a series of new risks to retirement stability, from inadequate individual retirement savings to broad global uncertainty, that have surfaced since the financial collapse.
Published: June 15, 2010
Defying Expectations: Rainfall Insurance in India and Bank Lending in Pakistan
In developing countries, economic behavior does not always follow patterns set in developed ones. Two papers presented at a conference on India's Financial System explore such examples. One asks why the poorest Indian farmers choose not to purchase inexpensive rainfall insurance that could help them avoid starvation in a drought. A second explores an unexpected phenomenon in Pakistan, when banks failed to increase their business loans despite a rich increase in capital after the September 11 terrorist attacks. The conference, held at Wharton in April, was organized by the school's Financial Institutions Center with the Centre for Analytical Finance at the Indian School of Business in Hyderabad and the Stockholm-based Swedish Institute for Financial Research.
Published: February 01, 2010
Micro Insurance: A Safety Net With Too Many Holes?
Unlike micro lending -- the better-known side of micro finance -- micro insurance has been a hard sell among the world's poor. The reasons why include a lack of understanding of how insurance products work, a general reticence on the part of poor populations to part with their meager financial resources, badly designed products and a shortage of localized risk management knowledge among providers. What needs to happen for micro insurance to prove that it can be both socially beneficial and economically viable?
Published: February 01, 2010
Not So Golden: Employees -- and Employers -- Feel the Pinch from Shortfalls in Retirement Funding
The golden years for most Americans appear increasingly threatened by the global financial crisis. Retirement accounts have lost from $2 trillion to $4 trillion as stocks have tumbled nearly 50% from their peak in 2007. Pension funds -- which typically invest between 60% and 70% in equities -- are also finding their accounts billions of dollars below minimum requirements. For Americans facing retirement, the details of how these plans work may be fuzzy, but the big picture is clear: Whatever comfortable cushion retirees may have had is now gone, and the process of building it back up will be arduous and long.
Published: February 01, 2010
You've Worked Hard, Saved and Just Retired: How Do You Manage Your Finances Now?
As baby boomers retire and start spending their nest eggs, they will need new financial products to make their money last, according to speakers at a recent Wharton Impact Conference titled, "Managing Retirement Payouts: Positioning, Investing and Spending Assets." The conference explored emerging patterns in spending during retirement and debated new ideas to help retirees manage their finances after leaving the workforce.
Published: February 01, 2010
