Betting on Death and Capital Markets in Retirement: A Shortfall Risk Analysis of Life Annuities versus Phased Withdrawal Plans

How might retirees consider deploying the retirement assets accumulated in a defined contribution pension plan? One possibility would be to purchase an immediate annuity. Another approach, called the “phased withdrawal” strategy in the literature, would have the retiree invest his funds and then withdraw some portion of the account annually. Using this second tactic, the withdrawal rate might be determined according to a fixed benefit level payable until the retiree dies or the funds run out, or it could be set using a variable formula, where the retiree withdraws funds according to a rule linked to life expectancy. Using a range of data consistent with the German experience, we evaluate several alternative designs for phased withdrawal strategies, allowing for endogenous asset allocation patterns, and also allowing the worker to make decisions both about when to retire and when to switch to an annuity. We show that one particular phased withdrawal rule is appealing since it offers relatively low expected shortfall risk, good expected payouts for the retiree during his life, and some bequest potential for the heirs. We also find that unisex mortality tables if used for annuity pricing can make women’s expected shortfalls higher, expected benefits higher, and bequests lower under a phased withdrawal program. Finally, we show that delayed annuitization can be appealing since it provides higher expected benefits with lower expected shortfalls, at the cost of somewhat lower anticipated bequests.

Doping-induced quantum cross-over in Er2_2Ti2−x_{2-x}Snx_xO7_7

We present the results of the investigation of magnetic properties of the Er$_2$Ti$_{2-x}$Sn$_x$O$_7$ series. For small doping values the ordering temperature decreases linearly with $x$ while the moment configuration remains the same as in the $x = 0$ parent compound. Around $x = 1.7$ doping level we observe a change in the behavior, where the ordering temperature starts to increase and new magnetic Bragg peaks appear. For the first time we present evidence of a long-range order (LRO) in Er$_2$Sn$_2$O$_7$ ($x = 2.0$) below $T_N = 130$ mK. It is revealed that the moment configuration corresponds to a Palmer-Chalker type with a value of the magnetic moment significantly renormalized compared to $x = 0$. We discuss our results in the framework of a possible quantum phase transition occurring close to $x = 1.7$.Comment: accepted in PRB Rapi

TeV-scale Seesaw with Quintuplet Fermions

We propose a new seesaw model based on fermionic hypercharge zero weak quintuplet in conjunction with additional scalar quadruplet which attains an induced vev. The model provides both tree-level seesaw ~ v^6/M^5 and a loop-suppressed radiative ~ (1 / 16 \pi^2) v^2/M contributions to active neutrino masses. The empirical masses m_\nu ~ 10^{-1} eV can be achieved with M ~ TeV new states, accessible at the LHC. For 5 fb^{-1} of accumulated integrated luminosity at the LHC, there could be ~ 500 doubly-charged \Sigma^{++} or \bar{\Sigma^{++}} fermions with mass M_\Sigma = 400 GeV, leading to interesting multi-lepton signatures. The neutral component of the fermion quintuplet, previously identified as minimal dark matter candidate, becomes unstable in the proposed seesaw setup. The stability can be restored by introducing a Z_2 symmetry, in which case neutrinos get mass only from radiative contributions.Comment: 19 pages, 9 figures, corresponds to published versio

Optimizing the Retirement Portfolio: Asset Allocation, Annuitization, and Risk Aversion

Retirees must draw down their accumulated assets in an orderly fashion so as not to exhaust their funds too soon. We derive the optimal retirement portfolio from a menu that includes payout annuities as well as an investment allocation and a withdrawal strategy, assuming risk aversion, stochastic capital markets, and uncertain lifetimes. The resulting portfolio allocation, when fixed as of retirement, is then compared to phased withdrawal strategies such a %u201Cself-annuitization%u201D plan or the 401(k) %u201Cdefault%u201D pattern encouraged under US tax law. Surprisingly, the fixed percentage approach proves appealing for retirees across a wide range of risk preferences, supporting financial planning advisors who often recommend this rule. We then permit the retiree to switch to an annuity later, which gives her the chance to invest in the capital market and %u201Cbet on death.%u201D As risk aversion rises, annuities first crowd out bonds in retiree portfolios; at higher risk aversion still, annuities replace equities in the portfolio. Making annuitization compulsory can also lead to substantial utility losses for less risk-averse investors.

Spectroscopy of the stellar wind in the Cygnus X-1 system

The X-ray luminosity of black holes is produced through the accretion of material from their companion stars. Depending on the mass of the donor star, accretion of the material falling onto the black hole through the inner Lagrange point of the system or accretion by the strong stellar wind can occur. Cygnus X-1 is a high mass X-ray binary system, where the black hole is powered by accretion of the stellar wind of its supergiant companion star HDE226868. As the companion is close to filling its Roche lobe, the wind is not symmetric, but strongly focused towards the black hole. Chandra-HETGS observations allow for an investigation of this focused stellar wind, which is essential to understand the physics of the accretion flow. We compare observations at the distinct orbital phases of 0.0, 0.2, 0.5 and 0.75. These correspond to different lines of sights towards the source, allowing us to probe the structure and the dynamics of the wind.Comment: conference proceeding from Integral/Bart Workshop Karlsbad, CZ, 14.4-18.4 201

Stalk rot resistance in Maksimir 3 synthetic maize population after four cycles of recurrent selection

Fusarium stalk rot (FSR) and anthracnose stalk rot (ASR), caused by Fusarium spp. and Colletotrichum graminicola (Ces.) G.W. Wils. respectively, are the two most important stalk diseases in maize which increase the incidence of stalk lodging and reduce grain yield. The aim of the present study was to (1) evaluate the effect of four cycles of recurrent selection in the Maksimir 3 Synthetic (M3S) maize population on ASR and FSR resistance and (2) to investigate the correlation among the different disease rating methods. The experiment included six M3S cycle populations per se and their test-crosses with a single cross hybrid. ASR resistance was estimated on artificially inoculated plant rows using three ratings (the number of infected internodes, the number of internodes rotten more than 75% and evaluation of outer stalk discoloration) whereas FSR resistance was estimated in artificially inoculated rows as well as in naturally inoculated rows by rating severity of disease symptoms on longitudinally cut stalks using the standard resistance scale. The results of the present study showed that four cycles of selection in the M3S maize population, conducted primarily for grain yield improvement, did not significantly affect its resistance to both ASR and FSR. Among the disease ratings a moderate positive correlation was found only between two ASR resistance ratings (the number of infected internodes and the number of internodes rotted more than 75%) in both population per se (r=0.49**) and population test-crosses (r=0.56**)

Superconducting properties of an Ag-CLAD (BiPb)_2Sr_2Ca_2Cu_3O_10+y tape

AC susceptibility and V-I characteristics of a well characterised Ag-clad Bi-Pb-Sr-Ca-Cu-O tape have been studied in the temperature (T) range 77-106 K and magnetic fields (B) up to 0.06 T. The intrinsic critical current density J_s (from ac susceptibility) is 30000 A/cm2 at 77 K whereas the transport critical current density Jc (from V-I curves) is 10100 A/cm2 at the same temperature. Both Js and Jc showed power law variations with T and B, respectively, characteristic for intragranular flux creep. From the dissipation within the core the differential resistance Rf (associated with the flux flow) has been deduced. The magnitude and the variations of Rf with T and B are consistent with those due to flux flow in type II superconductors in low field. From d^2 V/d I^2 vs I curves very broad critical current distribution CCD has been deduced

Distribution and forms of iron in the vertisols of Serbia

Soil of arable land and meadows from the Ap horizon, taken from ten different localities, were investigated for different forms of Fe, including total (HF), pseudo-total (HNO3), 0.1 M HCl extractable and DTPA (diethylenetriaminepentaacetic acid)-extractable. A sequential fractional procedure was employed to separate the Fe into fractions: water soluble and exchangeable Fe (I), Fe specifically adsorbed with carbonates (II), reducibly releasable Fe in oxides (III), Fe bonded with organic matter (IV) and Fe structurally bonded in silicates (residual fraction) (V). The soil pH, cation exchange capacity, and size fractions (clay and silt) had a strongest influence on the distribution of the different forms of Fe. The different extraction methods showed similar patterns of the Fe content in arable and meadow soils. However, the DTPA iron did not correspond with the total iron, which confirms the widespread incidence of iron-deficiency in vertisols is independent of the total iron in soils. The amount of exchangeable (fraction I) and specifically adsorbed (II) iron showed no dependence on its content in the other fractions, indicating low mobility of iron in vertisols. The strong positive correlation (r = 0.812 and 0.956) between the content of iron in HNO3 and HF and its contents in the primary and secondary minerals (fraction – V) indicate a low content of plant accessible iron in the vertisol. The sequential fractional procedure was confirmed as suitable for accessing the content and availability of iron in the vertisols of Serbia