Post retirement, annuities provide a steady stream of income for retirees. However, the annuitization rate is relatively small in the insurance market in many countries around the world. Prior studies have shown that a substandard health status in retirement reduces annuitization due to adverse selection. Recent innovation introduces an enhanced annuity plan where individuals with impaired health are entitled to higher annuity payments. However, this market is less explored in countries other than the UK. This paper aims to study the optimal annuitization rate where both standard and substandard annuity rates are offered in the market. The life cycle model in this paper incorporates multiple health states based on the likelihood of events and quality of life measures. Our framework consists of two important parts. First, we estimate the transition probabilities of all health states in our Markov model using reliable national data. Second, we derive the optimal consumption and annuitization solution to maximize a retiree’s expected lifetime utility given the uncertainty of future health risk. In addition, we also consider the bequest motive in our optimization problem. Our results show that the optimal annuitization is driven by the choice of bequest and risk-aversion parameters, as well as the health status of the annuitant. Whilst the health-dependent utility parameter only affects our results for certain cases. Full article

This paper examines the poverty perceptions of retired women by assessing the extent to which demographic characteristics, economic considerations, household adequacy levels and satisfaction measures influence perceptions of poverty. Based on data from a South African national survey, binomial logistic regression models were employed, whereby demographic characteristics (first level variables) were assessed relative to the respondents’ poverty perceptions. Thereafter, economic considerations (second level variables) were included in the model to draw more inferences on the conditions leading to poverty perceptions. Finally, respondents’ household adequacy levels and satisfaction measures (third level variables) were nested into the model for a complete investigation of the antecedents of poverty perceptions. Many of the retired women in this study perceive themselves to be impoverished or at risk of poverty. The results indicate that marital status and education levels have a significant influence on perceptions of poverty. Furthermore, the study found that monetary measures do not sufficiently explain the pathway leading to retirement poverty perceptions. Instead, perceptions of financial security and the satisfaction with one’s standard of living influence gendered poverty perceptions. This study advances our understanding of the conditions influencing the poverty perceptions of retired women. As most of the respondents in this sample rely on the government for financial support, this study provides pertinent suggestions to government agencies on the conditions associated with gendered poverty perceptions at retirement. Full article

Thailand recently reached “aged” society status, signifying that over twenty percent of the population is over sixty. Considering that Thailand has a low literacy rate, a fractured pension system, and no regulations that could provide sufficient income to cover basic needs after retirement, there will be economic repercussions if the situation is not handled soon. The government and financial institutions have been encouraging Thai citizens to prepare retirement plans but lack understanding of the root causes of being unprepared for retirement. The objectives of this qualitative research were to explore the behavior, knowledge, and preparedness towards retirement in governmental and private wageworkers. Moreover, the study aims to identify the pain points of being unprepared for retirement and deliver the optimal solutions and sustainable retirement plans suitable for each segment. This article employed a sample of 46 wageworkers in Khon Kaen, Thailand with ages ranging from 20 to 59 years old. Qualitative semi-structured in-depth interviews and qualitative content analysis were conducted with the respondents asking about their income, expenses, pains, and problems towards saving for retirement, their desired outcome after they retire, and how they would achieve it. The framework used for the in-depth qualitative interview was by utilizing the customer, problem, and solution zoom tool. The research contributions were to facilitate Thai citizens being ready for retirement stages and overcome post-retirement risks sustainably. The results revealed that the sample could be divided into four segments by their characteristics. Two low-income segments share the same traits and behaviors that can prove that financial literacy plays an essential role in retirement readiness. Lower-income wage workers do not have their money put in place to prepare for retirement. Additionally, this article discussed the study’s implications for wageworkers, employers, and the Thai government. This article recommended that Thai citizens should accumulate wealth in various ways, including investment in financial assets and earning additional income from a second job. Employers should provide suitable retirement contribution schemes. The government should launch a policy enabling above-60-year-old seniors to continue working. Full article

Ιmplicit pension debt is attracting increasing attention worldwide as a driver of fiscal dynamics, operating in parallel to the (explicit) National Debt. A prudent examination of a state’s fiscal prospects should ideally encompass both, with due attention paid to the special features of each kind of debt. The explosion of government deficits as a result of the COVID-19 pandemic only adds to the urgency of understanding the scale and nature of issues around accounting for contingent liabilities. The reports of the EU Ageing working group, produced and published every three years are used to derive estimates of the stock of outstanding implicit pension debt from flows of projected deficits. This can be performed for all European member states. This paper uses the last two rounds of the Ageing Report (2021, 2018) and derives conclusions on the evolution of pension debt and its correlation to the external debt. The paper concludes that producing comparable estimates of IPD should become an important input in EU policy discussion. Full article