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Asset allocation and age effects in retirement savings choices

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Abstract:

Abstract

We examine the asset allocation decisions of members of three large Australian retirement savings funds. Superannuation Guarantee legislation in 1992 made Australian employees compulsory investors by requiring employers to contribute a fixed proportion of earnings to a superannuation fund on behalf of employees. A majority of these employees can choose an investment strategy for these contributions. We examine how actual investment strategy and asset allocation choices of members change with age in view of the conventional wisdom that individuals allocate less to risky assets as they age and investments theory which provides conflicting advice on the issue.

Keywords: Asset allocation; D14; D91; G11; Lifecycle; Retirement savings; Superannuation

Document Type: Research Article

DOI: https://doi.org/10.1111/j.1467-629X.2009.00330.x

Affiliations: 1: School of Accounting, Finance and Economics 2: School of Psychology, Edith Cowan University, Joondalup, WA 6027, Australia

Publication date: 2010-06-01

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