2017
DOI: 10.3390/risks5010020
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Optimal Time to Enter a Retirement Village

Abstract: Abstract:We consider the financial planning problem of a retiree wishing to enter a retirement village at a future uncertain date. The date of entry is determined by the retiree's utility and bequest maximisation problem within the context of uncertain future health states. In addition, the retiree must choose optimal consumption, investment, bequest and purchase of insurance products prior to their full annuitisation on entry to the retirement village. A hyperbolic absolute risk-aversion (HARA) utility functi… Show more

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Cited by 3 publications
(2 citation statements)
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“…Pliska and Ye (2007) extended Richard's model by allowing an unbounded lifetime. Zhang et al (2017) applied Richard's model to an optimal stopping problem concerning entry into a retirement village. This work of Merton and Richard has answered the question of optimal demand for life insurance and annuities under the assumption of complete markets, rational consumers and exponential discounting.…”
Section: Introductionmentioning
confidence: 99%
“…Pliska and Ye (2007) extended Richard's model by allowing an unbounded lifetime. Zhang et al (2017) applied Richard's model to an optimal stopping problem concerning entry into a retirement village. This work of Merton and Richard has answered the question of optimal demand for life insurance and annuities under the assumption of complete markets, rational consumers and exponential discounting.…”
Section: Introductionmentioning
confidence: 99%
“…The paper by Jinhui Zhang, Sachi Purcal, and Jiaqin Wei (Zhang et al 2017) considers the financial planning for a retiree wishing to enter a retirement village. The date of entry is determined by the retiree's utility and bequest maximisation problem within the context of uncertain future health states.…”
mentioning
confidence: 99%