Synopsis On

Investors Strategy towards Retirement Planning in Private Sector

Submitted To Lovely Professional University In partial fulfillment of the requirements for the award of degree of MASTER OF BUSINESS ADMINISTRATION

Submitted By: Group No:- F 39 Aijaz Ahmad Thoker (11100488) Priyanka Kumari (11100597)

Supervisor: Abhishek Chaudhry (15672) Assistant professor LPU

Sangeet Choudhary (11104463) Vinita Grover (11107522)

DEPARTMENT OF MANAGEMENT LOVELY PROFESSIONAL UNIVERSITY PHAGWARA PUNJAB

CERTIFICATION APPROVAL BY FACULTY ADVISOR

TO WHOM IT MAY CONCERN

This is to certify that the project report titled Investors Strategy Towards Retirement Planning in Private Sector carried out by Mr. Aijaz Ahmad Thoker, Ms. Priyanka Kumari, Mr. Sangeet Chaudhry, Ms. Vinita Grover has been accomplished under my guidance & supervision as a duly registered MBA students of the Lovely Professional University, Phagwara. This project is being submitted by them in the partial fulfillment of the requirements for the award of the Master of Business Administration from Lovely Professional University. This dissertation represents their original work and are worthy of consideration for the award of the degree of Master of Business Administration.

Mr. Abhishek Chaudhry(15672) (Name & Signature of the Faculty Advisor) Date:

DECLARATION OF AUTHENTICITY BY STUDENTS

DECLARATION

We hereby declare that the work presented herein is genuine work done originally by us and has not been published or submitted elsewhere for the requirement of a degree program. Any literature, data or works done by others and cited within this dissertation has been given due acknowledgement and listed in the reference section.

Aijaz Ahmad Thoker (Student's name & Signature) (11100488) Date:

Priyanka Kumari (Student's name & Signature) (11100597) Date:

Sangeet Choudhary (Student's name & Signature) (11104463) Date:

Vinita Grover (Student's name & Signature) (11107522) Date:

ACKNOWLEDGEMENT

We would like to thank our parents for their support and blessings through our life. We take this opportunity to thank all those guidepost who really acted as lightening pillars to enlighten their way throughout this project that has led to successful and satisfactory completion of this study. We would like to thank our friends and family for the moral support and ideas to go through in details. We are very thankful to our supervisor, Mr. Abhishek Chaudhry, whose support from the

initial day till the end allowed us to develop a good understanding of the subject. Last but not least, we would like to thank God who has helped to achieve and overcome all the obstacles. Thank you Aijaz Ahmad Thoker Priyanka Kumari Sangeet Choudhary Vinita Grover

WORK PLAN

S.NO 1 2 3 4 5 6 7 8 9

Tasks Study of topic(Introduction) Work on Literature Review Work on research Methodology Work on Tentative report Work on Questionnaire Filling of Questionnaire(Research) Analysis and Interpretation of data collected Work on Suggestions/ Recommendations Documentation of final report

Start Date 25/10/2012 1/11/2012 13/11/2012 20/11/2012 25/11/2012 7/1/2013 16/1/1013 21/2/2013 19/3/2013

End Date 31/10/2012 12/11/2012 20/11/2012 24/11/2012 15/12/2012 15/1/2013 20/2/2013 18/3/2013 31/3/2013

TABLE OF CONTENTS

Chapter No. 1. 1.1 1.2 Introduction

Contents Retirement planning in India Retirement planning tips in India 2012-2013

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Page No. 8 9 12

1.3 1.4 1.5 1.6 2. 3. 3.1 3.2 3.3 3.4 4. 5.

Benefits for private sector workers Investment vehicles/plans Investment strategies Withdrawal strategies Review of Literature Present work Need and Scope of study Objectives Research methodology Expected outcome of the study Conclusion References

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CHAPTER 1 INTRODUCTION

INTRODUCTION Retirement means different things to different people. To some it might bring a blessed release after the hectic earning years. A time for relaxation, peace, and a time of indulging in all the activities that got missed out before.

But for most, retirement conjures up a scary picture a time of financial insecurity, of having to cut down on most things that one took for granted before, having the constant worry of compromising on the standard of living that one was used to before, and being financially dependent ones children. Due to the various challenges and risks associated with retirement, we recommend retirement planning should be given its due importance and starts as soon as possible. To make retirement a truly enjoyable time, one needs to plan ahead. The most common mistake is either not planning for your retirement or leaving it to the last possible moment. Retirement Planning Works in 3 Steps Accumulation Preservation - Distribution. Accumulation is the stage where we invest to generate a decent corpus which is assumed to take care of us during retirement years. This accumulation we do till retirement. In Preservation stage we become cautious about our accumulated corpus and we start coming out of risky asset classes and start shifting the corpus into debt, though savings doesnt stop during this stage also, as our regular income stream is intact. Distribution is the stage when we make arrangements to use the corpus through interest, dividends and withdrawing capital which we have accumulated. In the complete retirement planning, distribution is the most important of all, as all our efforts of accumulation and preservation were directed towards this stage only. With a regular income stream no longer available, the savings made over ones working years now have to provide for all needs. Now your investments need to create a pay cheque for you. In accumulation and preservation stages the mistakes can be ignored as you were getting regular income, but at distribution stage, small mistakes can cost huge. 1.1 RETIREMENT PLANNING IN INDIA: In our country, where a very small number (less than 10% of the workforce which is in the organized sector) has access to some social security like provident funds, but the rest almost 90% of the workforce has no social security, Retirement Planning is a major issue. If you
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take care of your retirement planning, your future will probably be much better and in control than without doing anything. It has become extremely important to plan for ones retirement and at least take a step towards it. We are going to list down some pointers which shows why retirement in future India will be much bigger and serious issue. Look at all the points in totality and you will realize that planning for retirement is not just an option but a necessity these days. 1. Increase in life expectancy in India One of the major problems while doing retirement planning is to assume how long the retirement will last. This has a direct relation with life expectancy. As a country develops, its healthcare and overall life style level improves and life expectancy increases. You can see the life expectancy in India is moving up and up with each passing decade. It was 49 yrs in year 1970, increased to 64 yrs today in 2011 and is set to increase up to 73-76 yrs in 2040-50 (projections). Now this life expectancy of 76 yrs does not mean that everyone will die at age 76, its an average. If you personally have a better life style, better health and better medical access compared to a average Indian, chances are you will have a much more life expectancy which will cross 85-90 yrs . Leave future, even today you can see more and more people living up to an age of 80-85. So, you can safely assume that you will have to accumulate enough money which can last at least 30-35 yrs after your retirement, else make sure you die with your money itself. Overall the conclusion is Longer life in future will mean more money required in retirement compared to today. Simple! 2. Increase in Dependency Ratio Dependency ratio means the ratio of Old age population vs. Young population. To calculate it, just take total population above Age 60 and divide it with population between 15 yrs 60 yrs and you will get Dependency Ratio. You will be surprised to know that right now in 2011, the dependency ratio is around 5% in India, but in year 2050 this ratio will rise to 15%, which shows you that more and more people are going to be in the old age group compared to young population. See the chart below:

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This is not a small issue. More and more people will be shifting to this retired category in coming decades with more loads on the working population. At this current moment, we are one of the youngest countries today with as high as 50% population below 25 yrs of age, but will this continue forever? With more population control measures at government and public level, these numbers are going to be different in future. Hence the conclusion is More and more people will come into retired category as percentage of population in coming future. 3. Decline of joint family structure If it was 1970, you could have safely assumed that you will be probably spending your retirement with your grown up kids, playing with your grand children, but is it happening anymore in these changing times? More and more people are moving in different parts of country in search of education, jobs and settling their compared to old times. Parents on the other hand dont choose to move most of the times as they feel connected to the same place where they have spend all their life and more than that , they have their social groups at those native places. Very rarely I have seen that parents leave those places where they have spent 30-50 yrs of their life. Bigger opportunities in life and a complex life style have resulted in smaller family size and its going down each decade. As per research reports of National Family Health Survey , Ministry of
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Health and Family Welfare (MOHFW), Government of India, average household size in the year 1992 was 5.7, which means each family had 5.7 members, this came down to 5.4 in 1998 and as per last reports of 2007, average family size is 4.8. Now imagine this, each family having approx 4.8 members, thats today! Will it shrink further to 4.0 in coming decades, what do you think? I think if it does not go down, it will definitely not go up! That my personal opinion. So the conclusion is There are higher chances that you will be living separately and not with your kids, by choice or by society structure, unless you are living in smaller towns and villages. 4. Change in perception about Retirement Planning In a poll 83% said that they would like to be self-dependent and want to save all the money they would require in their retirement. Around 10% said that this is the first time they are having any thoughts about their retirement after seeing the poll and just 7% people expect to be fully or partially dependent on their children for their retirement. Which shows us that as high as 93% readers on this blog who participated in the poll want to be self dependent and plan their retirement themselves? Look at the poll results below.

1.2 RETIREMENT PLANNING TIPS IN INDIA 2012-2013 Retirement Planning Tips in India 2012-2013: People have different plans for retired life. For example you may think of retirement as a time to relax, to laze around, to spend more time with
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family, travel or write a masterpiece. Attaining financial independence after retirement will not be just a dream if the following steps are followed with steady discipline, perseverance and if smart investment strategies.

Start saving early: Nobody takes retirement seriously. But the fact is that even a small sum of money saved regularly and invested regularly makes a big amount which will come in very handy after retirement. One should not believe that after retirement, one can place all savings into income generating investment and spend rest of life in happiness.

Retirement should be your top priority: Retirement should be kept as a top priority because if one does not keep it at the top one might end up depending on one's children, which probably no one would relish.

Create a Retirement Plan: Develop a plan for saving based on your requirements at the time of retirement. The goals you keep for saving depend on your lifestyle but you will need at least about 66% of your pre-retirement income to maintain your standard of living when you stop working.

Understand your Pension Plan: If your employer offers pension plan, understand carefully your benefit level, financial stability of plan and the vesting period. Use retirement plans even if you already have enough money. With retirement plans your money grows in a tax efficient manner and compounding interest over time makes it one of the best investment options.

Balance your risk tolerance and your investment strategy: Evaluate your risk profile and then balance your investment strategy to invest in various avenues to get the most out of your retirement money keeping your risk profile unhampered.

Diversify your investments & allocate your assets carefully: Depending on your work profile divide your savings into equity, bonds, Mutual Funds, and other investment avenues. Don't invest too heavily in one sector or one company, since the risk associated with putting all your eggs in one basket is indeed very high. 1.3 BENEFITS FOR PRIVATE SECTOR WORKERS

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Superannuation: Superannuation Fund is a retirement benefit given to employees by the Company. Normally the Company has a link with agencies like LIC Superannuation Fund, where their contributions are paid. The Company pays 15% of basic wages as superannuation contribution. There is no contribution from the employee. This contribution is invested by the Fund in various securities as per investment pattern prescribed. Interest on contributions is credited to the members account. Normally the rate of interest is equivalent to the PF interest rate. On attaining the retirement age, the member is eligible to take 25% of the balance available in his/her account as a tax free benefit. The balance 75% is put in a annuity fund, and the agency (LIC) will pay the member a monthly/quarterly/periodic annuity returns depending on the option exercised by the member. This payment received regularly is taxable. In the case of resignation of the employee, the employee has the option to transfer his amount to the new employer. If the new employer does not have a Superannuation scheme, then the employee can withdraw the amount in the account, subject to deduction of tax and approval of IT department, or retain the amount in the Fund, till the superannuation age. Normally Companies do not extend the Superannuation benefits to all employees- but only to a specific category of employees - like for example Level1 of Managers onwards. Gratuity: Gratuity is a part of salary that is received by an employee from his/her employer in gratitude for the services offered by the employee in the company. Gratuity is a defined benefit plan and is one of the many retirement benefits offered by the employer to the employee upon leaving his job. An employee may leave his job for various reasons, such as - retirement/superannuation, for a better job elsewhere, on being retrenched or by way of voluntary retirement. Eligibility: As per Sec 10 (10) of Income Tax Act 1961, gratuity is paid when an employee completes 5 or more years of full time service with the employer. Tax treatment of Gratuity The gratuity so received by the employee is taxable under the head Income from salary. In case gratuity is received by the nominee/legal heirs of the employee, the same is taxable in their hands under the head Income from other sources. This tax treatment varies for different
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categories of individual assessee. We shall discuss the tax treatment of gratuity for each assessee in detail. In case of government employees they are fully exempt from income tax arising on from receipt of gratuity. In case of non-government employees covered under the Payment of Gratuity Act, 1972 Maximum exemption from tax is least of: I. Actual gratuity received; or II. Rs. 10, 00,000; or III. 15 days salary for each completed year of service or part there

1.4 INVESTMENT VEHICLES/PLANS

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Provident Fund: There are many investment vehicles in our country for the purpose of saving for ones retirement. But the most popular one among them has been Provident Fund. For a long time, provident fund has been the primary investment vehicle for saving for an individuals retirement nest until the entry of mutual funds and other new innovative products such as ULIP (Unit Linked Insurance Policy), ULPP (Unit Linked Pension Policy) etc. Provident fund can be considered as a debt instrument as majority of the corpus is invested in debt.

How it works?

A fixed sum (%) is deducted from employees salary as contribution to Provident Fund

Employer also contributes his share to the Provident Fund (Except Public Provident Fund). The pooled sum is invested in Various instruments and majority in debt

On maturity Employee gets his contribution + Employers contribution and interest accrued thereon on maturity and/or before maturity (due to pre-mature withdrawal, death of the deposit holder etc.) On death of the deposit holder before maturity In case of death of the deposit holder/employee, the sum so accumulated is paid to the legal heirs.

Annuities

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An annuity is a contract between the insurer and an individual whereby the insurer agrees to pay a specified amount in future in exchange for the money now paid by the individual. It is an investment that you make, either in a lump sum or through installments over a specified period of time (called the accumulation period), in return for which you receive a specific sum at regular intervals (either annually, semi-annually, quarterly or monthly), either for life or for a fixed number of years. By buying an annuity or a pension plan the annuitant receives guaranteed income for the period as specified in the policy. Annuities are also popularly known as pension plans. This is because they are typically bought to generate regular income during ones retired life. Annuities can be viewed as a solution to one of the biggest financial insecurities of old age; outliving ones retirement corpus. The period when you are investing is called accumulation phase. In return for the investment, the annuitant receives back a specific sum every year, every half year or every month, either for life or a fixed number of years. This period when the annuitant receives the payments is known as the distribution phase. Generally, one opts to receive annuity payments (also known as un commuted payments) upon retirement. One important aspect is to make sure that the payments you receive will meet your income needs during retirement. Some of the common pay out options upon retirement are Receive lump-sum payment of all of the money you have accumulated during your working years. Receive regular payments over a specific period of time.

Types of Pension Plans Including New Pension Scheme (NPS) With Its Features
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The two most common types of pension plans are the defined contribution (or the money purchase plan) and the defined benefit plan. Sometimes these two plans are combined and the combination is thus known as hybrid plans or combination plans. Defined Benefit (DB) plans: In these kinds of plans, the benefit to be paid to the employee is defined or fixed at the beginning of the plan, e.g. final years salary multiply by number of years of service. Here the employer funds the plan and the employee reaps the rewards upon retirement. The employer has to use actuarial assumptions like retirement age, mortality, expected life span, expected compensation increase and other demographic assumption to estimate the pension liability and accordingly contribute in the pension plan. From an employers perspective, defined-benefit plans are an ongoing liability. Returns on the plans are assumed and estimated in such a way to get the desired payout to the employee. The funding for these plans must come from corporate earnings which affect the company profits. The impact on profits can weaken a companys ability to compete. Moreover the demographics or the assumptions keep changing hence companies all around the world are slowly shifting the burden towards employees by introducing defined contribution plans. The investment risk is borne by the employer in the defined benefit plan. Defined Contribution (DC) plans: This is also known as money purchase plan. Under this plan, the contribution to the pension plan by the employee is fixed (say 12% of salary) and the same is matched by the employer. The money is placed in the investment instruments selected by you in your investment account. After you retire, these investments along with interest are used to buy pension or annuity. However, under DC plan, one cannot be sure of the final pension amount at retirement. Ultimately, the pension benefit that you are going to receive after your retirement will depend upon the performance of the investment made on your behalf. Unlike a defined-benefit plan, where the employee knows exactly what his or her benefits will be upon retirement, there is no such certainty regarding investments in a defined-contribution plan. After the money is pooled into the retirement account, its up to the uncertainties of the investments to determine the final outcome.
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Apart from pension plans of employers, there are two broad categories of pension plans from life insurers - Traditional endowment policies and unit-linked policies. They differ primarily in the way the money of the policyholder is invested and grows during the accumulation phase. A traditional plan invests primarily in debt instruments. The buyer needs to choose a sum assured that becomes his maturity corpus if he survives the term. Over and above this guaranteed corpus, he would get loyalty additions and bonuses which the company would declare from time to time. The loyalty addition will be declared for the policy holder based on the period for which he has paid the premium amount even in case of death. Bonus is the amount given to the policy holder apart from their maturity or death benefits. The additions depend on the performance of the company and its profits. If the policyholder dies before the plans maturity, the nominee gets the sum assured plus the additions. On survival, the policyholder gets the sum assured plus the bonus and loyalty additions for investing in the second stage. Mutual funds also have started offering pension plans, which are also targeted towards saving for ones retirement. These are debt-oriented balanced funds that take equity exposure of up to 40 per cent and invest the balance in debt instruments. Though they are hybrid in nature, their equity exposure is much lower than balanced funds that invest up to 65 to 70 percent in equity. Other pension plans for private players: Nowadays there are a number of private insurance players in the market. All of them generally provide two types of pension plans - with life cover and without life cover. However the Insurance Regulatory body IRDA has proposed mandatory life cover with Pension products. The with life cover pension plans offer an assured life cover in case of an eventuality, even if the corpus built till the date of death happens to be below that amount. Under the without cover pension plan, the corpus built till the date of death (net of deductions like expenses and premiums unpaid) is given out to the nominees in case of an eventuality, with no sum assured. The taxability of a pension plan is determined in two stages. The first is at the time of making annual premium payments and other at the time of maturity. Premium payments towards pension plans are eligible for deduction under Section 80C of Income tax Act 1961. The overall limit for deduction under Sections 80C and 80C is Rs 1 lakh. In other words, one is eligible for same tax deduction for the premium amount paid for; with or without life cover

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pension plans. At the time of maturity, the commuted value of the pension (lump sum amount) which is received from a life insurance plan is tax-free. However, the monthly pension amounts are fully taxable and included in ones taxable income, irrespective of whether or not the policy holder claimed the deduction under Section 80C or Section 80C at the time of payment of premium. Reverse Mortgage: A house can generate money by way of rent, which improves ones financial situation. This is the reason why the concept of Reverse Mortgage was introduced. Although reverse mortgage is a well-developed product in the West 3 decades ago, it is a fairly new concept in India. A reverse mortgage is a loan available to senior citizens. As its name suggests, it is exactly opposite of a typical home loan, where repayments are made to the housing finance company (HFC)/ bank every month until the tenure of the loan. Reverse mortgage is so named because the payment stream is reversed, that is instead of the borrower making monthly payments to the lender, the lender makes payments to the borrower. The process is simple. Once you pledge your house for reverse mortgage with any HFC/ bank, the HFC/ bank estimates the value of the house. Then, taking into account the cost of credit, it makes monthly payments to you. The loan is typically settled after the death of the owner/co-owners.

1.5 INVESTMENT STRATEGY:

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Life cycling Strategies: A lifecycle approach to investing in retirement normally involves reducing the exposure to risky (or growth) assets in the retirees portfolio as he or she ages (or approaches a given target date). A criticism of this approach is that its pre-programmed schedule (glide path) takes no account of actual investment returns experienced by the retiree and the resultant adequacy of the retiree assets to sustainably provide for the planned level of drawdown over their remaining lifetime. But does the strategy of switching out of equities with time, popularly known as lifecycle investing, benefit investors? 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. Lifecycle investment strategies are also said to reduce the volatility of wealth outcomes making them desirable to investors who seek a reliable estimate of final pension a few years before retirement (for example, see Blake, Cairns, and Dowd, 2001). On the other hand, most researchers note that these benefits come at a substantial cost to the investor - giving up significant upside potential of wealth accumulation offered by more aggressive strategies (Booth and Yakoubov, 2004; Byrne et al., 2007). Bodie and Treussard (2007) argue that deterministic target date funds as commonly implemented - are optimal for some investors, but not for others, with suitability depending on the investors risk aversion and human capital risk. A modified approach which aims to address this shortcoming can be called dynamic/smart life cycling. Under this approach an ideal (target) and worst case (minimum) level annual indexed drawdown from the retirees account is established upfront. The lifecycle glide path is not preprogrammed in advance but is varied over time based on the size of the retirees account balance (reflecting investment returns achieved on the account) to date and the corresponding sustainable income (SI) that the account balance is likely to be able to support over the retirees future lifetime. The account will be without risked when the SI approaches the target income (so as to lock in the ideal income), and also when the SI approaches the minimum income (to protect against income falling below this level). Between these two extremes, the account will take on more risk based on the relative priorities for attaining target income and avoiding falling to or below minimum income.

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Various refinements could be added to the basic design for example, rather than fully derisking, a minimum level of growth assets (possibly age related) or a constraint on the size of shifts in allocation in any year, could be applied to reduce transaction costs and to ensure the retiree retains a risk exposure which is consistent with their remaining investment time horizon. While dynamic life cycling is more complex than traditional life cycling, it is a more conceptually sound approach it produces a glide path appropriate to members retirement income objectives rather than assuming a purely age-based risk tolerance. To apply this approach, the actual glide path rules would be developed by the trustee taking into account the relative priorities for attaining target income and avoiding falling to or below the minimum income. If the dynamic lifecycle option is to be used as a default investment option, the design process would involve analyzing the profile of future retirees in the default option and determining suitable target and minimum income levels to be used in setting the glide path. Dynamic asset allocation strategy is where the switching of assets at any stage is based on cumulative investment performance of the portfolio relative to the investors target at that stage. Unlike conventional lifecycle asset allocation rules where the switching of assets is preordained to be unidirectional, this dynamic strategy can switch assets in both directions: from aggressive to conservative and vice versa.

Safe Savings Rates: A New Approach to Retirement Planning over the Lifecycle: The amount of money, expressed as a percentage or ratio that one deducts from his/her disposable personal income to set aside as a nest egg or for retirement. The cash accumulated is typically put into very low-risk investments (depending on various factors such as expected time until retirement), like a money market fund or a personal IRA comprised of non-aggressive mutual funds, stocks and bonds.

1.6 Withdrawal Strategies:

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4% Rule: The first strategy considered is the 4% Rule described above. Stated simply, in the first year of retirement, a retiree will withdraw 4% from his/her portfolio. The withdrawal amount is adjusted for inflation in subsequent years throughout retirement. This strategy serves as a baseline for comparison with other strategies. Floor & Ceiling Strategy: The floor and ceiling are defined in real terms based upon the initial withdrawal amount. One recommendation is to set the floor at 10% below the initial withdrawal amount and the ceiling at 25% above the initial withdrawal amount. In any retirement year, if the planned real withdrawal amount falls below the floor or exceeds the ceiling, the withdrawal amount is kept at the floor or ceiling respectively. Modified 4% Strategy: This rule specifies that the withdrawal amount in any year should be 4% of the portfolio value in that year. This will guarantee that the retiree's portfolio will never be depleted, but because the size of the portfolio will change according to returns, the annual withdrawals will also fluctuate. This strategy adds the protection that if the portfolio loses value in a particular year, the income in the next year will be cut to 95% of the prior year's level. The 95% level is used even if the drop in the portfolio would have prescribed a lower withdrawal. This helps to smooth out major swings in withdrawals. In subsequent years the assets will continue to be withdrawn at 4%. Decision Rules Strategy: The Decision Rules Strategy proposed by Guytonand Klinger uses dynamic rules to guide withdrawals. The initial withdrawal rate from the retirement portfolio is set at 5.3% and later grows with inflation subject to decision rules. The decision rules are actions a reasonable retiree might take under various economic conditions. The articles stated here are slightly modified from the original research to make them more easily implemented. During retirement, if a year's portfolio return is negative and the withdrawal rate, as adjusted, would be greater than the initial withdrawal rate, the withdrawal amount is frozen at the prior year's level. To further protect the
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portfolio, if the withdrawal rate exceeds 6.36% in a given year, then that year's withdrawal is reduced by 10% from the prior year. This rule is not applied after age 85. Inorder to take advantage of good economic conditions, if the withdrawal rate falls below 4.24%, then the withdrawal amount is increased 10% over the prior year. Safe Reset Strategy: This strategy from Stein and DeMuth recognizes that a retiree can safely withdraw more later in retirement than earlier because the retirement portfolio needs to last fewer years. In this strategy, the withdrawal rate is a function of the retiree's age and adjusted only for inflation for five years before being reset to a new withdrawal rate determined by the expected number of years remaining in the person's retirement. The prescribed withdrawal rate is 4.7% with 40 years remaining in retirement, 5% at 35 years, 5.3% at 30 years, 5.6% at 25 years, 6.4% at 20 years, 7.9% at 15 years, and 8.6% with 10 years remaining in retirement. To protect against poor economic conditions early in retirement, if the portfolio return is negative in any of the first 10 years, the withdrawal rate is set to 4%. Aggressive Strategy: For those retirees wanting to spend more early in retirement rather than later, Klinger proposed an Aggressive Strategy where the withdrawal amount is defined in real terms and decreases over the retirement period.'' A smooth aggressive strategy decreases real withdrawals each year by a set amount. For example, with a $ 1 million portfolio a smooth strategy may start with $53,375 in withdrawals, which would decrease $368 annually in real terms for a 20% drop in the annual real withdrawal over retirement. (The withdrawal amounts scale proportionately to the portfolio size.) The annual withdrawal amounts defined this way serve as the maximum allowable real withdrawal amount in each year. To protect the portfolio against losses, if the portfolio has a negative return in any year, the next year's withdrawal is reduced by 10%. The real withdrawal amount in any year is not allowed to fall more than 10% below the maximum for that year. Alternatively, if economic times are good and the withdrawal rate in any year falls below 3.8%, the next year's withdrawal is increased by 10%.Any increases in withdrawals are capped at the maximum real income prescribed for that year.

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CHAPTER 2 LITERATURE REVIEW

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REVIEW OF LITERATURE

Lori L. Embrey & Jonathan J. Fox (1997) used a sample of singles drawn from 1995 Survey of Consumer Finances to explore gender differences in the investment decision-making process. The determinants of some investment decisions were found to differ by gender, but gender did not appear to be a critical determinant of investment choice. They find that Women are more likely to hold risky assets if expecting an inheritance, employed and holding higher net worth; while men invested in risky assets if they are risk seekers, divorced, and college educated. However, in the sample of singles drawn from the 1995 Survey of Consumer Finances, gender did not prove to be the critical determinant of investment choice. In fact, there is no difference in investment patterns in financial assets attributable to gender. Instead, differences in financial investment decisions between men and women appeared to be more a result of differences in wealth as measured by net worth and the expectation of an inheritance. The allocation of total assets toward housing and businesses did appear to be at least partially determined by gender. Men and women did appear to make investment in housing and business decisions differently. Women are investing more in houses if they has receive an inheritance, has a short time horizon, and are widow and they invested more in businesses if they are widow, has not receive an inheritance, or are wealthy. Hugo Bentez Silva & Debra S. Dwyer (June, 2002) examined how a wide array of factors (household and individual level financial, health and other taste shifter characteristics) influence retirement plans over time and how uncertainty affects the strategies that individuals use to plan their retirement years. It was found that people with higher net worth plan to retire earlier probably because they can afford to. People who can afford private health insurance are also more likely to plan an earlier retirement. Higher earners are postponing retirement. People who report themselves in poor health plan to retire later. Using panel data models the role of health and economic factors on retirement planning using the Health and Retirement Study (HRS) was examined. Health and socio-economic factors are all factors that influence the formation of expectations, with health explaining more of the variation. Rationality of plans for retirement controlling for sample selection was examined. After controlling for sample selection, reporting biases, and unobserved heterogeneity it was found that plans for retirement followed the random
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walk hypothesis and pass tests of weak and strong rationality. Then the effects of new information on plans were examined and the result was that new information contributes little to changes in plans. This leads us to conclude that on average people correctly form expectations over uncertain events when planning for retirement. Joy M. Jacobs-Lawson, Douglas A. Hershey (2005) done a study to explore the extent to which individuals knowledge of retirement planning, future time perspective, and financial risk tolerance influence retirement saving practices. A total of 270 young working adults participated in the study. Regression analyses reveal that each of the three variables is predictive of saving practices, and they interact with one another as well. For those with a short time perspective who were high in knowledge, the relationship between risk tolerance and saving is only marginally significant. For those who were both low in time perspective and knowledge, the relationship between risk tolerance and saving is near zero. Failing to look to the future ensures a minimal impact of risk tolerance on saving, almost irrespective of how much one knows about financial planning. Among individuals, high in future orientation and knowledge, risk tolerance has a relatively small, influence on saving practices. For individuals high in future orientation and low in knowledge, risk tolerance exerts a relatively strong effect on savings. From a theoretical perspective, the finding from this study is that future time perspective and risk tolerance interact with one another to influence retirement saving. From an applied perspective, the findings suggest that counseling and intervention efforts aimed at promoting retirement saving should differentially target individuals on the basis of these three psychological dimensions. David A. Wise (April 2006) studied the shift and explored the conventional wisdom that this shift increases risk for retirees and will result in lower accumulation of retirement assets. In particular, it focuses on personal retirement accounts and considers the options available for retirees to contain risk and assess the likely outcomes over alternative options, including life cycle allocation. He came with the result that personal retirement accounts better than the defined benefit pensions by using life cycle strategy. Annamaria Lusardi & Olivia S. Mitchell (October 2007) did a research that talk about financial knowledge during workers prime earning years when they are making key financial decisions, and it offers detailed financial literacy and retirement planning questions, permitting a finer assessment of respondents financial literacy than heretofore feasible. Financial literacy is a
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key determinant of retirement planning. They also found that respondent literacy is higher when they were exposed to economics in school and to company-based financial education programs. They also found that education, income, and age are correlated with but do not adequately capture the full flavor of the financial literacy measures developed here. Second, the fact that they found more financially literate adults are more likely to plan for retirement complements other analysts who have sought to link financial sophistication and decision making. For instance, research showed that financially unsophisticated households tend to avoid the stock market. The financially unsophisticated are also less likely to refinance their mortgage in a propitious environment, and they select less advantageous mortgages (Moore 2003). People who cannot correctly calculate interest rates given a stream of payments, borrow more and accumulate less wealth. By this their results show that the financially illiterate do not plan for retirement either. Anup K. Basu & Michael E. Drew (2007) compared the lifecycle asset allocation strategy with the contrarian strategy by investors to invest. According to this paper no doubt the strategy used by employees is lifecycle strategy but it is the contrarian strategy that increases the accumulated value more. Currently employees invest by lifecycle asset allocation funds. They invest aggressively to risky asset classes when they are young and gradually switch 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. Due to this portfolio size effect, we find the terminal value of accumulation in retirement account to be critically dependent on the asset allocation strategy adopted by the participant in later years. Contrarian strategies which switch to risky stocks from conservative assets produce far superior wealth outcomes relative to conventional lifecycle strategies. This demonstrates that the size of the portfolio at different stages of the lifecycle exerts substantial influence on the investment outcomes and therefore should be carefully considered while making asset allocation decisions. Lifecycle asset allocation strategies focus on two objectives: maximizing growth in the initial years of investing and reducing volatility of returns in the later years. Our findings suggest that the bulk of the growth value of accumulated wealth actually takes place in the later years. The first objective, therefore, has little relevance to the overarching investment goal of augmenting
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the terminal value of plan assets in. A strategy of switching to less volatile assets a few years ahead of retirement can only be rationalized if the employee participant has already accumulated wealth well in excess of their accumulation target a few years before retirement. Jeffrey R. Brown (October 2007) studied the role of annuities in retirement planning that are explaining the basic theory underlying the individual welfare gains available from annuitizing resources in retirement. It then contrasts these findings with the empirical findings that so few consumers behave in a manner that is consistent with them placing a high value on annuities. After reviewing the strengths and weaknesses of the large literature that seeks to reconcile these findings through richer extensions of the basic model, this paper turns to a somewhat more speculative discussion of potential behavioral stories that may be limiting demand. Overall, the paper argues that while further extensions to the rational consumer model of annuity demand are useful for helping to clarify under what conditions annuitization is welfare-enhancing, at least part of the answer to why consumers are so reluctant to annuitize will likely be found through a more rigorous study of the various psychological biases that individuals bring to the annuity decision. According to this article, we have a much greater understanding of how we think consumer ought to optimally behave and of how they actually do behave with respect to annuity decisions. Until we have a better understanding of why consumers act as if they place so little value on annuitization, it will remain unclear whether individual and social welfare will be enhanced by policies that promote annuitization, or even which policies would be successful at doing so. As such, the economics and psychology of the annuitization decision remains a very fruitful area for additional research. Steve Vernon (March 2009) talked about three resources, called the "three-legged stool" that supports retirement may not be sufficient to support the traditional retirement for many people: Personal saving is at an all-time low. Employers have been reducing or eliminating traditional defined-benefit and retiree medical plans. Social Security has long-term financial difficulties, and some experts predict that benefit cutbacks are likely.
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The middle class will need to change their goals from the traditional retirement, defined as "not working," to a "rest-of-life" that is fulfilling, healthy, and financially secure. To achieve these goals, working Americans will need to adopt lifestyle solutions that complement financial solutions. Financial professionals can help their clients make the most effective choices regarding financial solutions. Analyzing the realistic limits of financial solutions helps identify when non-financial solutions are needed. To summarize the themes in this article, financial professionals can play a critical role in helping those in the middle class prepare for their retirement years. Financial professionals can help analyze the realistic limits of traditional financial solutions and discuss holistic strategies that integrate financial and lifestyle solutions, because the challenges may be more behavioral than technical. Christine C. Marks (October 2009) conducted a study to better understand how well American workers felt their retirement savings had weathered the economic storm, and also to look ahead and gauge interest in more innovative workplace plans that hold the promise of better outcomes. The Four Pillars of Retirement represent the foundation of retirement security today, from Social Security to the choices made in retirement. The four pillars are social security, employment based plan personal savings and retirement choices. The majority of employees saw the benefits of all five automatic features: enrollment, initial contribution rate, contribution escalation, asset allocation, and guaranteed retirement income. Among more experienced employees who spent most of their employment careers without the benefits of these automatic features, 59% feel they would have been better off today if their employers had used the entire package of auto-pilot features. Furthermore, two-thirds would recommend the auto-pilot approach to younger workers. W Rudman (November 2009) investigated optimal asset allocation as a means of minimizing the investment risk, drawdown risk and longevity risk associated with an investment linked living annuity. The three risk elements were tested for various categories of retirees investing the full retirement savings amount in a living annuity. In order to reach the aim and objectives of the study, a literature overview of the current South African retirement environment was classified the South African public according to savings habits, the propensity to save and knowledge on the financial industry. The second part of the literature review highlighted key considerations
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with regards to an optimal asset allocation. The key considerations included the risk versus return relationships for retirees, various unit trust sectors and portfolios within the South African financial market, the investment horizon also stated as the life expectancy of a retiree and withdrawal strategies applied by investors or retirees. The study continued with the empirical study modeling the pre- and post-retirement phases respectively. The conclusion was made on the pre-retirement phase and post-retirement phase. The preretirement phase provided insights into the amounts available for retirement. Three factors were used as variables in modeling the pre-retirement phase. These factors included the rate at which contributions were made towards an approved retirement savings scheme, the investment term and the investment growth rate received throughout the savings term. The post-retirement phase tested the sustainability of income withdrawals at various withdrawal rates from a range of asset allocations. In order to minimize the risks, a retiree investing in a living annuity need to consider the following factors: available retirement capital, life expectancy, drawdown rate as stated by a net replacement ratio, investment capital growth, risk versus return relationship and the allocation of funds towards different asset classes. The assumptions used in the study such as sector growth rates, inflation, saving terms and forecasting models can be considered a limitation. Anup Basu, Alistair Byrnes & Michel E. Drew (2009) compared the traditional lifecycle strategy with dynamic lifecycle strategy. According to their results the chance of the dynamic strategy underperforming the lifecycle strategy at the end of such a long horizon is small (though not insignificant). Not only does the dynamic strategy produce superior terminal wealth outcomes compared to the lifecycle strategy in a vast majority (about 75 -80%) of cases, it appears to have a fair chance of outperforming a 100% equity strategy. Hoe Kock & Jee Yoong (July 2010) examined expected retirement age cohorts as a main determinant to financial planning preparation. A total of 600 questionnaires were distributed with a 55% return rate. Five hypotheses were analyzed using hierarchical and stepwise regression analysis. Results revealed that expected retirement age cohort variables made significant contribution to financial planning preparation as well as personal orientation towards retirement planning. The results indicate that current financial resources do have an impact on
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positive orientation towards retirement planning particularly for those in the younger age group. The younger age cohorts usually have very little savings so they may be planning to save or increase their disposable income for a better standard of living in later years. However, it is not very clear if their intention to save more is purely to improve their standard of living during mid life or saving for their retirement. Further research can be carried out for this life cycle path looking at their propensity to save and the sort of investment strategies applied. Expected retirement age do affect personal orientation towards retirement planning with the confidence level making a significant impact. On the other hand, no significant effect was found between expected retirement age cohort and current financial resources but older age cohorts were relatively more significant predictors. The financial planning model derived from the lifecycle theories showed positive influences from the personal demographics such as work status, education, household composition, and income variables as life-cycle factors affecting the expectation and planning outcomes. This is also talks about the points of financial literacy, and government support which we discussed in first two articles. Towers Watson (October 2010) showed that even in a somewhat brighter economic climate, employees continue to be worry about their long term retirement planning and they are postponing their retirement, spending less, saving more and are willing to pay guaranteed benefits in the future. These challenges will have a significant impact on employees. Employees are taking action to shore up their balance sheet. Increasing number of older employees are saving more compared with the overall employee group. They are also beginning to rethink how far those savings will take them. Compare with the two years ago, fewer employees thinks they will need to save much more in the future to achieve a comfortable level of income in their retirement. Employees with the DC plans recognize a need to save more. Similarly, they have started to more contribution for their plans. They expect to continue this contribution over the next 12 months. Less people are comfortable with their retirement plan and their own decision. In actually they are confused. The effect of the economic crisis on employee attitudes toward is risk is significant and long lasting. Todays retirement and health care affordability challenges could be creating group of hidden pensioners, employee who want to retire but unable to do so. This could lead to a host workforce of management issues as these productive employees remain on company payrolls. Ultimately, these changes in employee attitude toward retirement could
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have long term implication for workforce planning, talent management, attraction, retention and engagement.
By Brendan McFarland & Erika Kummernuss (2010) told about the how employers are changing

their strategy like they shift from traditional defined benefit (DB) to defined contribution (DC). According to which employees should also change their strategy, it also talks about some products by which they can change their strategy. Only 38% of Fortune 1000 companies maintain a DB plan and have no frozen plans a stark decline from 2004, when 59% of Fortune 1000 companies had not frozen a DB plan. The shift from traditional DB plans to DC plans has redirected a share of employer funding away from older workers, thereby enabling younger workers to make more significant contributions toward a financially secure retirement. Nonetheless, events such as the 2008 stock market crash highlight some potentially problematic effects on workforce patterns created by DC-only platforms. Many DC plan accounts suffered major losses during the recent financial crisis, forcing some older workers to postpone retirement to recover from market losses and rebuild their retirement nest eggs. This shows that a sudden economic slowdown effect all the investment of the employee made with employer from their salary. DB plans provide greater reliability and security for workers, and offer sponsors unique opportunities for long term financial efficiency and workforce management. Paul Myeza & Dawie De Villiers (2010) did an annual Sanlam survey of SA retirement fund industry and members reveals:

60% of pensioners had insufficient savings levels, leading to 64% of these cutting back on expenses and 31% had to work to supplement their income 80% of retirement funds did not provide post-retirement medical aid 50% of pensioners face increasing responsibilities such as dependants and 29% have debt Gross investment returns of retirement funds almost double at 11.4%. According to the surveys findings, this article suggest that;

Retirement contributions still well below recommended average, despite warning signs from pensioners

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Member misconceptions highlight increasing need for education and responsibility Post-retirement healthcare costs underestimated members actually prefer to be compelled to save.

Member communication improves if investment returns bounce back.

Towers Watson (2010) Life-cycle investment strategies were designed some years ago in the United States and United Kingdom to ensure that designed contribution plan members who do not make their own investment decisions have a reasonably appropriate risk/return profile over their saving life. Today, life-cycle investment strategies are quickly becoming a well-established part of the defined contribution (DC) landscape in Canada as well 24% of DC plans with a default option utilize a life-cycle strategy for this purpose, and another 14% are considering changing the default option to a life-cycle strategy over the next 18 months. Traditional lifecycle investment strategies attempt to determine the most appropriate asset mix for DC plan members to balance their risk and return profiles based on the number of years the members have until retirement. Younger members with longer to retirement tend to invest more in growth assets, typically equities, while more mature members with fewer years to retirement tend to gradually transfer their assets to protection seeking investments. Life-cycle investment strategies remain a good automated, risk-controlled asset allocation strategy for DC plan members portfolios. Both the theory and evidence suggest it is a good way of ensuring an appropriate balance of risk and return. Implementation, however, is crucial, and as DC plans grow to significant importance, some improvements in this area are becoming necessary. They suggest it is desirable for some plans to place more emphasis on the middle group, the guided selectors, when designing the plan and the engagement strategy. This group of members would benefit from better DC design that enables them to consider their own circumstances more when structuring their DC assets. William Klinger (January 2011) examined eight different strategies proposed by researchers and pundits by simulating and evaluating the strategies according to a common set of criteria. In order to address the important concern and criterion of the trade-off between total real retirement income and real legacy, the strategies are also simulated to show the effect of purchasing immediate annuities with different percentage of the retirement portfolio. An approach is
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presented to help guide a retiree or planner in selecting the best strategy for the retiree. The strategies are 4% Rule, Floor & ceiling strategy, Modified 4% strategy, Decision rules strategy, Safe Reset Strategy, Aggressive Strategy, Half-Annuity strategy, and Delayed-Annuity Strategy. The research uses Monte Carlo simulation to test the retirement strategies. The first observation in the conclusion that can be made is that simulations of the retirement strategies show that all the strategies can produce high success rates. Second, the retirement income profiles produced by the strategies show marked differences. Third, the research shows that the strategies can be combined with annuities purchased at retirement to give retirees control over their total retirement income and the legacy they leave. Pragya Mishra (June 2011) did a research in which she focused on how various retirement benefit scheme available can help protect against post retirement risks and financial insecurities, particularly in light of the current uncertain economic and financial global environment. Of particular interest was the question whether and how legislative framework can be better used or designed to meet and manage retirement risks. This research showed that the pension market is far from exhausted. Indeed more workers than ever before seek sensible pension designs to help them save during the accumulation phase, and also to help them manage pension payouts in retirement. According to this research paper 90% per cent of Indias total working population is not covered for post retirement life. The Indian Parliament has evolved a comprehensive legislative framework to effectuate proper implementation of retirement benefit plans. The major Acts and Schemes which deal with retirement benefit issues are as under: The Pension Act,1871 The Employees' Provident Funds and Miscellaneous Provisions Act,1952 Payment of Gratuity Act, 1972 Voluntary Retirement Scheme

After reading all these schemes we come to know that if a person is aware about it then he/she can use that scheme to make good investment strategy for retirement planning. But this paper did not talk about how to better protect retiree minimum pension guarantees, ultimately the coreconcern of retirement plan designers. George Burns (September 2011) explored that how much challenges people face in planning of income nearest retirement age. The research simulates the challenge of investing and planning
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for a secure retirement is a growing concern or not. How is there a greater awareness and interest in guaranteed retirement income products, these products are more likely to keep in the stock market, is Investors recognize significant challenges in planning retirement income, Investors want help with retirement income decisions and even as they become more self-reliant. More people were reporting that retirement concern investments are reliable for life. They believe that this is a trade-off for their life. Most of people were positive for retirement stage and, also for growth and concern for asset. They were also positive for risk concern prospective. They found high bullish. Investors should consider the contract and the underlying portfolios investment objectives, risks, charges and expenses carefully before investing. This and other important information is contained in the prospectus, which can be obtained from your financial professional. Please read the prospectus carefully before investing. A variable annuity is a longterm investment designed for retirement purposes. Investment returns and the principal value of an investment will fluctuate so that an investors units, when redeemed, may be worth more or less than the original investment. Withdrawals or surrenders may be subject to contingent deferred sales charges. Annuity contracts contain exclusions, limitations, reductions of benefits and terms for keeping them in force. Your licensed financial professional can provide you with complete details. Optional benefits, available for an additional fee, have certain investment, holding period, liquidity, and withdrawal limitations and restrictions. All guarantees, including optional benefits, are backed by the claims-paying ability of the issuing company and do not apply to the underlying investment options. Study of Americans (2011) explored the gauge the financial and emotional impact of the 200809 market crisis and access Americans outlook for their near-term and long-term financial prospects, which includes the role of financial products and trust in the financial service industry. It explores that the financial crisis and the ensuing recession created significant financial and retirement challenge for Americans. Two-thirds agree that the events of the past few years were different than, anything they have ever experienced. Most investors believe that the investments they have today are not earning enough to make up for the losses theyve experienced over the past few years. Investors are being more thoughtful and selective about the financial services firms they will choose. Exploration of new products will be limited if investors dont know which firms or advisors they can trust. Discerning the good from the bad presents a

36

challenge for many investors. Americans are calling for a better way to protect and secure their financial futures. Winning their trust is the challenge. Financial services firms must make a concerted effort to win trust and inspire confidence if they are to effectively help. Americans achieve financial and for retirement security.

Wade D. Pfau(2011) provided a simple scenario to illustrate the principle of the safe savings rate. Introducing more realistic factors could either increase or decrease required in saving rate. According to this The savings rate does not need to be fixed, as individuals can make projections for their future income, unique consumption needs such as raising children or paying for a home, and retirement expenditures. Allowing for consumption smoothing needs, these projections can be calibrated with a variable savings rate needed to fit the planned pattern of lifetime savings. It should use actual historical return for better study of retirement planning.

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CHAPTER 3 PRESENT WORK

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3.1

NEED AND SCOPE OF STUDY

Private sector employees dont get any retirement benefit from the government. So in order to have a secure and independent life after retirement they need to plan for it. There is the need to invest the money wisely so as to have an enough amount at retirement to spend the after retirement life happily. There is the scope of the study for financial planners to know what the investors are thinking and how they are behaving. It is a need to know what the various factors are that are affecting the decision making in choosing the strategy for retirement planning.

3.2 OBJECTIVES

To know the various strategies that the private sector employees use to invest for retirement planning.
To know the various factors those are affecting the decision regarding the choice of

strategy. To know the awareness of employees regarding various product of retirement.

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3.3 RESEARCH METHODOLOGY The Study: The report would be an exploratory one and as such will involve the collection of both primary and secondary data. It would be exploratory in nature and would provide insight about the various factors affecting the decision making in choosing the strategy regarding retirement planning. It will help to identify and define the key research variables. Sample Design: 1. Population: The population for this research will include faculty and other staff members of lovely professional university.
2. Sampling Elements:

Sampling elements consist of individual respondents.

3. Sampling Techniques:

In this research non- random sampling technique will be used for collecting data and under that it will be convenience sampling. 4. Sample Size: Sample size will be of 200 individual respondents. Data Collection:

Primary data will be collected by means of questionnaires Secondary data was extracted from books such as (Naval Bajpai), Journal of contemporary research in business and by browsing internet, websites like:

www.ebescohost.com www.googlescholar.com www.essayrelief.com

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www.ssrn.com www.proquest.com www.collegeboard.com

3.4 EXPECTED OUTCOME OF STUDY

Private sector employees use different strategies in different stages of life. Age is an important factor that is influencing the decision regarding the selection of strategy. Private sector employees use aggressive strategy in early life and conservative strategy in late age. Knowledge about investment, risk tolerance, marital status are some important factors that influence decision towards strategy selection.

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CHAPTER 4 CONCLUSION Till now we find that private sector employees get the minimum retirement plans or benefits from their employer which is approximate 335% less than a government employer. There are various products available in the market to better plan a retirement but for that a person should have proper or full knowledge about the product in which he /she wants to invest. By reading the various research papers and journals we find that life cycle strategy have the more impact on the retirement plan than the other strategies, which further divided in two major strategies,

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aggressive and conservative but according to us whenever a person plan their retirement should go with modern/dynamic life cycle strategy because it gives more elaborative data. There are four pillars called social security, employment based plan personal savings and retirement choices are available for better retirement plan. The strategies also differ on the basis of gender also, in one article they show women are invested more in real estate if they got in heritance. Financial literacy is also a major point in deciding strategies which almost discussed in all papers related to retirement planning.

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CHAPTER 5 REFERENCES

I.

Journals/Research paper:

1. Annamaria Lusardi (Dartmouth College) & Olivia S. Mitchell (University of

Pennsylvania), (October 2007), Financial Literacy and Retirement Planning: New Evidence from the Rand American Life Panel 2. Anup K. Basu & Michael E. Drew (2007), Portfolio Size and Lifecycle Asset Allocation in Pension Funds 3. Anup Basu, Alistair Byrnes and Michael E. Drew (2009), Dynamic Lifecycle Strategies for Target Date Retirement Funds, Griffith Business School, discussion paper, Finance 4. Brendan McFarland and Erika Kummernuss (2010), Pension Freezes Continue Among Fortune 1000 Companies in 2010, Towers Watson 901 N. Glebe Rd. Arlington 5. Christine C. Marks (October 2009), The New Economic Reality And The Workplace Retirement Plan, Prudentials Sixth Annual Workplace Report On Retirement Planning
6. David A. Wise (2006), Financing Retirement: The Private Sector(The shift from defined

benefit pension to personal retirement accounts is likely to benefit retirees), Business Economic

7. George Burns (September 2011), Changing Attitudes About Retirement Income, Journey well, arrive better-Redefining DC investment

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8. Hoe Kock, TAN and Jee Yoong FOLK (July 2010), Expected retirement age: A

determinant of financial planning preparation, African Journal of Business Management, Vol. 5(22), pp. 9370-9384

9. Hugo Bentez Silva and Debra S. Dwyer (June, 2002), Retirement Expectations Formation Using the Health and Retirement Study

10. Jeffrey R. Brown (October 2007), Rational and Behavioral Perspective on the Role of Annuities in Retirement Planning, National Bureau Of Economic Research Working Paper No. 13537

11. Joy M. Jacobs-Lawson & Douglas A. Hershey (2005), Influence of future time perspective, Financial knowledge and financial risk tolerance on retirement saving behaviors, Financial Services Review vol.14, pp. 331344

12. Lori L. Embrey & Jonathan J. Fox(1997), Gender Differences In The Investment Decision-Making Process, Financial Counseling and Planning, Vol. 8

13. Pragya Mishra, Hidayatullah National law University, Raipur (Chattisgarh), (June 2011), Analysis of Retirement benefits and the Legislative framework in India Quest International Multidisciplinary Research Journal, Vol-1, Issue-1 14. Steve Vernon (March 2009), Retirement Planning for the Middle Class: Holistic Strategies will be Essential, FSA, Journal of Financial Service Professionals

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15. Study of Americans Current Financial Perspectives(2011), Meeting Investment and Retirement Challenges

16. Towers Watson (2010), The Life Cycle Strategy, Canadian Capital Accumulation Plan Survey 17. Towers Watson (October 2010), Retirement Attitude: Part 2-Employee Attitudes Toward Risk

18. Wade D. Pfau, Ph.D. (2011), Safe Savings Rates: A New Approach to Retirement

Planning over the Life Cycle, May 2011 Journal of financial planning

19. William Klinger (January 2011), In Search of the Best Retirement Strategy, Journal of Financial Service Professionals, January 2011

20. W Rudman (November 2009), Post-Retirement Planning: Asset Allocation North-West University, Potchefstroom Campus

II.

Websites:

1. www.ebescohost.com 2. www.googlescholar.com 3. www.essayrelief.com 4. www.ssrn.com 5. www.proquest.com

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6. www.collegeboard.com 7. www.towerswatson.com

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