The role and helpfulness of pensions in personal financial investment after retirement

Tian  Huang; Deyi  Shi; Shihao  Xue

doi:10.54691/bcpbm.v23i.1359

Authors

Tian Huang
Deyi Shi
Shihao Xue

DOI:

https://doi.org/10.54691/bcpbm.v23i.1359

Keywords:

Pension, Capital Asset Pricing Model, Fama-French Three Factor Model.

Abstract

More than 90% of wage earners in the United States can receive pension options benefits after retirement. It is especially important to manage funds reasonably and choose the right investment after retirement. We use the capital asset pricing model (CAPM) and the Fama-French three-factor model to establish pension and non-pension investment portfolios and measure the return and risk changes of pension portfolio investments under different portfolio investments. The experimental results show that pensions are of great help to the return and Sharpe ratio of portfolio investments. With the intervention of different factors, pensions provide good and stable income support for portfolio investments. Especially under the expectations of different markets, pensions performed extremely well in portfolio investments. With the establishment of reasonable portfolio investment, we suggest that adding pensions to the portfolio investment will bring more stable investment performance.

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