Skip to main content

Main menu

  • Home
  • Current Issue
  • Past Issues
  • Videos
  • Submit an article
  • More
    • About JOR
    • Editorial Board
    • Published Ahead of Print (PAP)
  • IPR Logo
  • About Us
  • Journals
  • Publish
  • Advertise
  • Videos
  • Webinars
  • More
    • Awards
    • Article Licensing
    • Academic Use
  • Follow IIJ on LinkedIn
  • Follow IIJ on Twitter

User menu

  • Sample our Content
  • Request a Demo
  • Log in

Search

  • ADVANCED SEARCH: Discover more content by journal, author or time frame
The Journal of Retirement
  • IPR Logo
  • About Us
  • Journals
  • Publish
  • Advertise
  • Videos
  • Webinars
  • More
    • Awards
    • Article Licensing
    • Academic Use
  • Sample our Content
  • Request a Demo
  • Log in
The Journal of Retirement

The Journal of Retirement

ADVANCED SEARCH: Discover more content by journal, author or time frame

  • Home
  • Current Issue
  • Past Issues
  • Videos
  • Submit an article
  • More
    • About JOR
    • Editorial Board
    • Published Ahead of Print (PAP)
  • Follow IIJ on LinkedIn
  • Follow IIJ on Twitter
Article
Open Access

Editor’s Letter

Brett Hammond
The Journal of Retirement Winter 2021, 8 (3) 1-2; DOI: https://doi.org/10.3905/jor.2021.8.3.001
Brett Hammond
Editor
  • Find this author on Google Scholar
  • Find this author on PubMed
  • Search for this author on this site
  • Article
  • Info & Metrics
  • PDF
Loading

We learned recently that for the first time since the Great Depression, due to COVID overall life expectancy in developed countries is projected to decline. In the US, this comes on top of an increase in “deaths of despair,” particularly among lower-income, less-educated White Americans. Demographers would point out that COVID and deaths of despair have not only lowered the average, they have increased the variance of life expectancies. Among all of the sources of uncertainty regarding retirement, this is yet another. To this point, Anna Rappaport’s insightful review of the new book by Sandy MacKenzie (founding editor of The Journal of Retirement) considers how the COVID pandemic affects the myriad complex issues Mackenzie covers in his analysis of retirement income, medical benefits, and long-term care in the US and other countries.

The first article in this issue, “Measuring Racial/Ethnic Retirement Wealth Inequality,” finds that Black and Hispanic households have less than half of the wealth of White households even when including future Social Security benefits as a form of wealth. The authors, Wenliang Hou and Geoffrey Sanzenbacher of the Center for Retirement Research, use Health and Retirement Survey data to show that, despite this wealth disparity, the progressivity of Social Security combined with lower average incomes for minority households means that the retirement income replacement rate of Black households averages about 80 percent of White households and that of Hispanic households averaged 95 percent. At first glance, this finding may seem comforting with respect to the role that Social Security plays in assuring retirement income for minority households, but it highlights both the income and non–Social Security gaps experienced by minority households. In other words, the US continues to face large disparities in financial well-being.

As such, we applaud this effort and encourage additional research on the relationship between race, ethnicity, income, and wealth to support appropriate discussions of financial well-being and retirement security.

“Financial Literacy, the ‘High Fee Puzzle,’ and Knowledge about the Importance of Fees,” by Leslie Muller and John Turner, contributes to the question of how best to balance individual responsibility with paternalism when it comes to improving decision making regarding long-term investing for retirement. Their research shows that individuals tend to choose high-fee investment options even when lower-fee alternatives are available on an investment menu. This is due to a lack of financial literacy, which they assert may be difficult to overcome through education. To increase returns and the chances of achieving long-term investment goals, they propose that pension sponsors take responsibility for limiting higher-fee options.

The design of defined contribution investment options has come a long way. Among other things, we have seen expansion and then contraction of investment menus, a debate about active versus passive investments and the emergence and dominance of default options such as target date funds. In “A Framework for Designing Investment Strategies for Default Retirement Plans,” Edwin Lung, Craig Roodt, Laura Ryan, Geoffrey Warren, and Kirsten Wymer consider objective and subjective elements that should guide the development of default options. These include participants’ wants/needs, investment objectives, characteristics, and risk appetite. They rightly assess interactions among these elements as well as plan participant heterogeneity, and they sketch out the implications for plan design.

Finally, we have a contribution that focuses on the challenges that some countries face with a lack of good demographic data in designing and maintaining health pension systems. In “Assessing the Impact of Longevity Risk for Countries with Limited Data,” Samuel Assabil and Don McLeish point out that many developing countries, particularly those on the African continent, do not account for longevity risk in their annual pension valuations because of a lack of suitable mortality data. Moreover, “borrowing” mortality data from one country to approximate mortality in a target country leads to errors and imprecision that can undermine pension health. To address this problem, Professors Assabil and McLeish developed an estimation method based on the nearly linear relationship between an annuitant’s hazard function and their mortality at higher ages. This permits an approximation using the Gompertz model, which is applied to the case of Ghana. Such an approach can assist other developing countries in assessing and managing the health of their pension systems.

Brett Hammond

Editor

  • © 2021 Pageant Media Ltd

PreviousNext
Back to top

Explore our content to discover more relevant research

  • By topic
  • Across journals
  • From the experts
  • Monthly highlights
  • Special collections

In this issue

The Journal of Retirement: 8 (3)
The Journal of Retirement
Vol. 8, Issue 3
Winter 2021
  • Table of Contents
  • Index by author
  • Complete Issue (PDF)
Print
Download PDF
Article Alerts
Sign In to Email Alerts with your Email Address
Email Article

Thank you for your interest in spreading the word on The Journal of Retirement.

NOTE: We only request your email address so that the person you are recommending the page to knows that you wanted them to see it, and that it is not junk mail. We do not capture any email address.

Enter multiple addresses on separate lines or separate them with commas.
Editor’s Letter
(Your Name) has sent you a message from The Journal of Retirement
(Your Name) thought you would like to see the The Journal of Retirement web site.
CAPTCHA
This question is for testing whether or not you are a human visitor and to prevent automated spam submissions.
Citation Tools
Editor’s Letter
Brett Hammond
The Journal of Retirement Jan 2021, 8 (3) 1-2; DOI: 10.3905/jor.2021.8.3.001

Citation Manager Formats

  • BibTeX
  • Bookends
  • EasyBib
  • EndNote (tagged)
  • EndNote 8 (xml)
  • Medlars
  • Mendeley
  • Papers
  • RefWorks Tagged
  • Ref Manager
  • RIS
  • Zotero
Save To My Folders
Share
Editor’s Letter
Brett Hammond
The Journal of Retirement Jan 2021, 8 (3) 1-2; DOI: 10.3905/jor.2021.8.3.001
del.icio.us logo Digg logo Reddit logo Twitter logo CiteULike logo Facebook logo Google logo LinkedIn logo Mendeley logo
Tweet Widget Facebook Like LinkedIn logo

Jump to section

  • Article
  • Info & Metrics
  • PDF

Similar Articles

Cited By...

  • No citing articles found.
  • Google Scholar

More in this TOC Section

  • BOOK REVIEW: Is There a Retirement Crisis? An Exploration of the Current Debate
  • Editor’s Letter
Show more Article
LONDON
One London Wall, London, EC2Y 5EA
United Kingdom
+44 207 139 1600
 
NEW YORK
41 Madison Avenue, New York, NY 10010
USA
+1 646 931 9045
pm-research@pageantmedia.com
 

Stay Connected

  • Follow IIJ on LinkedIn
  • Follow IIJ on Twitter

MORE FROM PMR

  • Home
  • Awards
  • Investment Guides
  • Videos
  • About PMR

INFORMATION FOR

  • Academics
  • Agents
  • Authors
  • Content Usage Terms

GET INVOLVED

  • Advertise
  • Publish
  • Article Licensing
  • Contact Us
  • Subscribe Now
  • Log In
  • Update your profile
  • Give us your feedback

© 2021 Pageant Media Ltd | All Rights Reserved | ISSN: 2326-6899 | E-ISSN: 2326-6902

  • Site Map
  • Terms & Conditions
  • Cookies
  • Privacy Policy