This paper surveys the academic literature on optimal saving and investment over an
individual's life cycle. We start out with a simple benchmark model with separable and …

Life-cycle portfolio choice models capture the role of human capital, housing, borrowing
constraints, background risk, and several other crucial ingredients for determining the …

The study of household finance is challenging because household behavior is difficult to
measure, and households face constraints not captured by textbook models. Evidence on …

Household financial decisions are complex, interdependent, and heterogeneous, and
central to the functioning of the financial system. We present an overview of the rapidly …

In a life-cycle model, a retiree faces stochastic health depreciation and chooses
consumption, health expenditure, and the allocation of wealth between bonds, stocks, and …

The “annuity puzzle,” conveying the apparently low interest of retirees in longevity
insurance, is central to household finance. Two possible explanations are “public care …

Retirement flexibility and inability to borrow against future labor income can significantly
affect optimal consumption and investment. With voluntary retirement, there exists an optimal …

Over the last couple of decades unprecedented increases in life expectancy have raised
important concerns for retirement savings. We solve a life-cycle model with longevity risk …

We study the importance of time-varying bond risk premia in a consumption and portfolio-
choice problem for a life-cycle investor facing short-sales and borrowing constraints. Tilts in …

This paper derives optimal lifecycle asset allocations for consumers who select work hours
and retirement ages given uncertain labor income and investment returns. These shocks …