Are target date funds the easy bake option?

Target date funds provide a simple, automated approach to retirement savings in defined contribution plans. The passing of the Pension Protection Act of 2006 has seen an increase in the popularity of these funds in the United States, becoming the default option for many plans. However, recent research findings have challenged the easy bake or ‘set-and-forget’ nature of target date funds. This study explores some of the critical design features of target date funds (which shifts an individual’s asset allocation from growth to defensive assets following a pre-set glidepath) against a simple balanced (or target risk) fund design. Using both time-weighted and dollar-weighted returns, our results suggest that there is more to achieving successful retirement outcomes than the investor simply selecting a proposed year of retirement. Our findings can perhaps be summarized by Einstein’s famous epithet, that in the murky world of retirement product design, everything should be made as simple as possible, but not simpler.

Sequencing risk : the worst returns in their worst order

For the first of the baby boomers turning 65 years of age, after a decade littered with financial shocks (dot.com bubble, sub-prime, global financial crisis, sovereign debt), sequencing risk can represent a significant threat to their retirement nest eggs. This paper takes an outcomeoriented approach to the problem, to provide practical insights into how sequencing risk works and the critical dependency of retirement outcomes on sequencing risk. Our analysis challenges the conventional wisdom that it is the accumulated average of investment returns that matter. We show, instead, that it is the realised sequence of returns which largely determines the sustainability of retirement incomes.

Transition to retirement and participation in mainstream community groups using active mentoring: a feasibility and outcomes evaluation with a matched comparison group

BACKGROUND: This paper reports on the feasibility and outcomes of a transition to retirement programme for older adults with disability. Without activities and social inclusion, retirees with disability are likely to face inactivity, isolation and loneliness. METHODS: Matched intervention and comparison groups each consisted of 29 older individuals with disability. There were 42 men and 16 women with a mean age of 55.6 years While attending their individual mainstream community group 1 day per week, intervention group participants received support from community group members trained as mentors. We assessed participants' loneliness, social satisfaction, depression, life events, quality of life, community participation, social contacts, and work hours before and 6 months after joining a community group. RESULTS: Twenty-five (86%) of the intervention group attended their community group weekly for at least 6 months. They increased their community participation, made an average of four new social contacts and decreased their work hours. Intervention participants were more socially satisfied post-intervention than comparison group members. CONCLUSIONS: The results demonstrate that participation in mainstream community groups with support from trained mentors is a viable option for developing a retirement lifestyle for older individuals with disability.

Basketball retirement: process and outcomes

Retirement from a sport career represents a turning point in the life of a sportsman. The aim of this study was to determine how the process of withdrawal of professional basketball players and the factors that influence it. Using a qualitative methodology, semi-structured interviews were conducted with 6 professional players focusing on their experiences during the process. Analysis of the interviews revealed the need to treat this process from a multidimensional perspective, as several factors interact. The results obtained show that the players assign great importance to the economic, academic and adjustment difficulties. Consequently, we discuss the need for specific assistance programs for these athletes, regardless of their previous professional level.

Transition from community dwelling to retirement village in older adults:cognitive functioning and psychological health outcomes

Supported living and retirement villages are becoming a significant option for older adults with impairments, with independence concerns or for forward planning in older age, but evidence as to psychological benefits for residents is sparse. This study examined the hypothesis that the multi-component advantages of moving into a supported and physically and socially accessible “extra care” independent living environment will impact on psychological and functioning measures. Using an observational longitudinal design, 161 new residents were assessed initially and three months later, in comparison to 33 older adults staying in their original homes. Initial group differences were apparent but some reduced after three months. Residents showed improvement in depression, perceived health, aspects of cognitive function, and reduced functional limitations, while controls showed increased functional limitations (worsening). Ability to recall specific autobiographical memories, known to be related to social-problem solving, depression and functioning in social relationships, predicted change in communication limitations, and cognitive change predicted changes in recreational limitations. Change in anxiety and memory predicted change in depression. Findings suggest that older adults with independent living concerns who move to an independent but supported environment can show significant benefits in psychological outcomes and reduction in perceived impact of health on functional limitations in a short period. Targets for focussed rehabilitation are indicated, but findings also validate development of untargeted general supportive environments.

Portfolio size effect in retirement accounts : what does it imply for lifecycle asset allocation funds?

Lifecycle funds offered by retirement plan providers allocate aggressively to risky asset classes when the employee participants are young, gradually switching to more conservative asset classes as they grow older and approach retirement. This approach focuses on maximizing growth of the accumulation fund in the initial years and preserving its value in the later years. The authors simulate terminal wealth outcomes based on conventional lifecycle asset allocation rules as well as on contrarian strategies that reverse the direction of asset switching. The evidence suggests that the growth in portfolio size over time significantly impacts the asset allocation decision. Due to the portfolio size effect that is observed by the authors, the terminal value of accumulation in retirement accounts is influenced more by the asset allocation strategy adopted in later years relative to that adopted in early years. By mechanistically switching to conservative assets in the later years of a plan, lifecycle strategies sacrifice significant growth opportunity and prove counterproductive to the participant's wealth accumulation objective. The authors' conclude that this sacrifice does not seem to be compensated adequately in terms of reducing the risk of potentially adverse outcomes.

Dynamic lifecycle strategies for target date retirement funds

Target date retirement funds have gained favor with retirement plan investors in recent years. Typically, these funds initially have a high allocation to stocks but move towards less volatile assets, such as bonds and cash, as the target retirement date approaches. Empirical research has generally found that a switch to low-risk assets prior to retirement can reduce the risk of confronting the most extreme negative outcomes. This article questions the rationale for lifecycle switching based solely on age or target retirement date as is the prevalent practice among target date funds. The authors argue that a dynamic switching strategy, which takes into consideration achieved investment returns, will produce superior returns for most investors compared to conventional lifecycle switching. In this article, the authors put forward a dynamic lifecycle switching strategy that is conditional on the attainment of the plan member's wealth accumulation objective at every stage of switching.

Applying the ecological model of behavior change to a physical activity trial in retirement communities : description of the study protocol

Objectives To describe the intervention protocol for the first multilevel ecological intervention for physical activity in retirement communities that addresses individual, interpersonal and community influences on behavior change. Design A cluster randomized controlled trial design was employed with two study arms: a physical activity intervention and an attention control successful aging condition. Setting Sixteen continuing care retirement communities in San Diego County. Participants Three hundred twenty older adults, aged 65 years and older, are being recruited to participate in the trial. In addition, peer leaders are being recruited to lead some study activities, especially to sustain the intervention after study activities ceased. Intervention Participants in the physical activity trial receive individual, interpersonal and community intervention components. The individual level components include pedometers, goal setting and individual phone counseling. The interpersonal level components include group education sessions and peer-led activities. The community level components include resource audits and enumeration, tailored walking maps, and community improvement projects. The successful aging group receives individual and group attention about successful aging topics. Measurements The main outcome is light to moderate physical activity, measured objectively by accelerometry. Other objective outcomes included physical functioning, blood pressure, physical fitness, and cognitive functioning. Self report measures include depressive symptoms and health related quality of life. Results The intervention is being delivered successfully in the communities and compliance rates are high. Conclusion Ecological Models call for interventions that address multiple levels of the model. Previous studies have not included components at each level and retirement communities provide a model environment to demonstrate how to implement such an intervention.

Exploring socioecological correlates of active living in retirement village residents

This study explored individual, social, and built environmental attributes in and outside of the retirement village setting and associations with various active living outcomes including objectively measured physical activity, specific walking behaviors, and social participation. Residents in Perth, Australia (N = 323), were surveyed on environmental perceptions of the village and surrounding neighborhood, self-reported physical activity, and demographic characteristics and wore accelerometers. Managers (N = 32) were surveyed on village characteristics, and objective neighborhood measures were generated in a Geographic Information System (GIS). Results indicated that built- and social-environmental attributes within and outside of retirement villages were associated with active living among residents; however, salient attributes varied depending on the specific outcome considered. Findings suggest that locating villages close to destinations is important for walking and that locating them close to previous and familiar neighborhoods is important for social participation. Further understanding and consideration into retirement village designs that promote both walking and social participation are needed.

Promoting and maintaining physical activity in the transition to retirement: A systematic review of interventions for adults around retirement age

It has been argued that transition points in life, such as the approach towards, and early years of retirement present key opportunities for interventions to improve the health of the population. Research has also highlighted inequalities in health status in the retired population and in response to interventions which should be addressed. We aimed to conduct a systematic review to synthesise international evidence on the types and effectiveness of interventions to increase physical activity among people around the time of retirement. A systematic review of literature was carried out between February 2014 and April 2015. Searches were not limited by language or location, but were restricted by date to studies published from 1990 onwards. Methods for identification of relevant studies included electronic database searching, reference list checking, and citation searching. Systematic search of the literature identified 104 papers which described study populations as being older adults. However, we found only one paper which specifically referred to their participants as being around the time of retirement. The intervention approaches for older adults encompassed: training of health care professionals; counselling and advice giving; group sessions; individual training sessions; in-home exercise programmes; in-home computer-delivered programmes; in-home telephone support; in-home diet and exercise programmes; and community-wide initiatives. The majority of papers reported some intervention effect, with evidence of positive outcomes for all types of programmes. A wide range of different measures were used to evaluate effectiveness, many were self-reported and few studies included evaluation of sedentary time. While the retirement transition is considered a significant point of life change, little research has been conducted to assess whether physical activity interventions at this time may be effective in promoting or maintaining activity, or reducing health inequalities. We were unable to find any evidence that the transition to retirement period was, or was not a significant point for intervention. Studies in older adults more generally indicated that a range of interventions might be effective for people around retirement age.

Health correlates of overweight and obesity in adults aged 50 years and over: results from the Survey of Health, Ageing and Retirement in Europe (SHARE)

QUESTIONS UNDER STUDY: To examine the association between overweight/obesity and several self-reported chronic diseases, symptoms and disability measures. METHODS: Data from eleven European countries participating in the Survey of Health, Ageing and Retirement in Europe were used. 18,584 non-institutionalised individuals aged 50 years and over with BMI > or = 18.5 (kg/m2) were included. BMI was categorized into normal weight (BMI 18.5-24.9), overweight (BMI 25.0-29.9) and obesity (BMI > or = 30). Dependent variables were 13 diagnosed chronic conditions, 11 health complaints, subjective health and physical disability measures. For both genders, multiple logistic regressions were performed adjusting for age, socioeconomic status and behaviour risks. RESULTS: The odds ratios for high blood pressure, high cholesterol, diabetes, arthritis, joint pain and swollen legs were significantly increased for overweight and obese adults. Compared to normal-weight individuals, the odds ratio (OR) for reporting > or = 2 chronic diseases was 2.4 (95% CI 1.9-2.9) for obese men and 2.7 (95% CI 2.2-3.1) for obese women. Overweight and obese women were more likely to report health symptoms. Obesity in men (OR 0.5, 95% CI 0.4-0.6), and overweight (OR 0.5, 95% CI 0.4-0.6) and obesity (OR 0.4, 95% CI 0.3-0.5) in women, were associated with poorer subjective health (i.e. a decreased risk of reporting excellent, very good or good subjective health). Disability outcomes were those showing the greatest differences in strength of association across BMI categories, and between genders. For example, the OR for any difficulty in walking 100 metres was non-significant at 0.8 for overweight men, at 1.9 (95% CI 1.3-2.7) for obese men, at 1.4 (95% CI 1.1-1.8) for overweight women, and at 3.5 (95% CI 2.6-4.7) for obese women. CONCLUSIONS: These results highlight the impact of increased BMI on morbidity and disability. Healthcare stakeholders of the participating countries should be aware of the substantial burden that obesity places on the general health and autonomy of adults aged over 50.

Land retirement: a biodiversity policy for the rangelands of Western N.S.W.

In this article we examine land retirement as a biodiversity policy option for the rangelands of Western NSW, a region seriously under-represented in biodiversity provision. We argue that the use of policies that rely on moral suasion, education and minimal costsharing will not yield the level of on-farm biodiversity provision demanded by society. Instead, a much greater commitment to the use of monetary incentives to induce the voluntary cooperation and production of biodiversity is required. The analysis explains the importance in policy design of determining transparent, meaningful and achievable objectives in delivering cost-effective environmental outcomes. We propose a land retirement
policy that rakes account of environmental, economic and political criteria. Finally, our land retirement proposal is supported quantitatively by benefit-cost analysis.