A Decision Model Of Financial Assets Based On Household Life Cycle

With China’s sustained economic growth and socio-economic restructuring is accelerating, China’s urban and rural residents’income levels substantially increase, the rapid growth of household wealth, while China’s aging population will become more serious, making the family life cycle within the financial assets accumulated and configuration decision-making becomes increasingly important.Firstly, the implied longevity yield model to explore whether the annuity can avoid family longevity risk. Secondly, the use of the financial assets of the family life cycle decision-making model for dynamic asset allocation decisions. Financial assets, investment targets, divided into two groups, one group only to consider the risk-free assets and risky assets, ie bonds and equities; another group to join annuity insurance, and annuity insurance case to further explore the different coefficient of risk aversion Heritage motivation, the income replacement rate, the policyholders additional costs rate and the inflation rate the impact on the family life cycle of each period the optimal consumption and investment decision-making and utility level.The example results show that the annuity can avoid longevity risk family members due to lack of senior citizens facing the pension. In addition, when the household financial assets of the investment targets included in the annuity, in the different variables under different circumstances, greater investment in the annuity can increase the utility level of the family life cycle. Thus, we suggest that Chinese families can be included in the annuity plan of its financial assets in decision-making, especially in family members in a retired financial stage.