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Money-back guarantees in individual retirement accounts: Are they good policy?

Vanya Horneff et al.

Journal of Pension Economics and Finance2025https://doi.org/10.1017/s1474747225000022article
AJG 2ABDC B
Weight
0.37

Abstract

Embedding mandatory investment guarantees in individual retirement accounts (IRAs) can protect workers from equity market shortfalls, but policymakers must understand the economic costs of such guarantees as well as their incidence. Using a life cycle model calibrated for Germany, where investors have access to stocks, bonds, and tax-qualified IRAs, we show that abandoning the guarantee could enhance old-age consumption for over 75% of retirees without harming pre-retirement consumption. Investors averse to equity losses accumulate only moderately more in guaranteed accounts, as these offer only limited protection against market crashes.

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https://doi.org/https://doi.org/10.1017/s1474747225000022

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@article{vanya2025,
  title        = {{Money-back guarantees in individual retirement accounts: Are they good policy?}},
  author       = {Vanya Horneff et al.},
  journal      = {Journal of Pension Economics and Finance},
  year         = {2025},
  doi          = {https://doi.org/https://doi.org/10.1017/s1474747225000022},
}

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Money-back guarantees in individual retirement accounts: Are they good policy?

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Evidence weight

0.37

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.16 × 0.4 = 0.06
M · momentum0.53 × 0.15 = 0.08
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.