Simple life-cycle models of labor supply and savings generally omit uncertainty. Yet people experience considerable uncertainty about wealth accumulation, financial needs, health, and job opportunities (1997). These uncertainties imply that people are continuously reconsidering their plans for retirement and wealth accumulation as their economic and health positions develop. The starting point of our research is to recognize the central place of these uncertainties and to explore the potential of longitudinal data for estimating labor supply in this setting. The benefits of preparation for retirement are overlooked by many. The oversight while one is still employed to think through the possibilities and possible problems is often based on some resistance to the idea of retirement, and a lack of confidence in the ability to plan. This is not to say that detailed preparation is a requisite for everyone. But some awareness of those changes that occur after leaving one's job might well contribute to a person's attitude toward retirement.
Retiree health plans often are continuations of the health coverage that the employer provides for similarly situated active workers, but just as often there are distinctions in the retiree coverage that reflect the special needs of that population (2001). In particular, all employer-provided retiree health coverage is designed around Medicare or its absence. Many employers pay at least some part of the cost of the retiree coverage that they offer, at least for the retired employee. Some plans require contributions from retirees that are higher than what active employees have to pay. Implicitly if not expressly, this recognizes that active employees also are "paying" the employer's share, which is offset directly or indirectly against their wages. Even where the employee and retiree contributions are set at the same levels, retiree payments are effectively higher because they are after tax, whereas almost all companies now enable their employees to pay their share of the cost of health coverage on a pre-tax basis (2001). It is not unusual for an employer to offer retiree health coverage on a retiree-pay-all basis. The plan offered to retirees is ordinarily the employer's active-employee health plan. The ability to buy it at cost (i.e, at age-neutral, large-group rates) could be a substantial benefit for retirees. The employer plan thus becomes another option for retirees who are shopping for Medigap coverage.
Compensation entails pay and benefits such as wage and salary administration, job descriptions, executive compensation, incentive pay, insurance, vacation/leave administration, retirement plans, profit sharing, and stock plans. These bring a variety of perspectives to the employees to bear in deciding whether they are satisfied with the compensation they receive, thus making management of compensation a particularly challenging HRM activity ( 2001)). In the Human Resources Management’s participation in maintaining balance between the goals of the business firm and its employees, fostering a safe and healthy work environment can help the employees increase their productivity, work well with their colleagues, and improve their performance, which are all helpful for the success of the company. The success of the company, thus, brings each employee shared success and stable work opportunities.
The amount of the employee's benefits depends in part on average earnings upon which Social Security taxes have been paid. These average earnings are adjusted for changes in average earnings that have occurred for the American workforce in general. The benefits also depend on the employee's family composition (e.g., whether or not the individual has a spouse that is eligible for benefits) and on the changes that occur after the individual becomes entitled to claim benefits. Since taxable earnings on which the benefits are based are subject to a maximum, the benefits are de facto limited as well.
An insured asset allocation strategy can be implemented by way of formula approach or a portfolio insurance approach ( 2004). The formula approach is a strategy done when as the portfolio decreases, more and more risk-free assets are being purchased so that when the portfolio reaches its base levels it is entirely invested in risk-free assets. The portfolio insurance uses put options and or future contracts to preserve the base capital. These two approaches are considered active management strategies, but when the base amount is reached, a passive approach is adopted. It would be suitable to risk-averse investors who desire a specific level of active portfolio management and at the same time appreciates the security of establishing a specific level where the portfolio should not be allowed to decline beyond that. For example, an investor who wishes a minimum standard of living during retirement might find an insured asset allocation strategy ideally suited to his management goals.
Credit:ivythesis.typepad.com
0 comments:
Post a Comment