Consider The Impact Of Delayed Retirement Policies On Workers’ Utility Under Annuity Acquisition

At present,China is in a period of accelerated population aging,and the government has to put the delayed retirement policy on the agenda in order to cope with the increasingly prominent retirement problems.Workers have different views on this,and it is worth exploring how to objectively and fairly evaluate the delayed retirement policy from the workers’ perspective.At the same time,the development of the pension business cannot be achieved without the participation of commercial annuities,the development of which in China has been frequently met with coldness.How to promote the development of commercial annuities and alleviate the pressure of retirement is an urgent issue to be solved at present.Therefore,this paper thus goes deeper and combines the delayed retirement policy and annuity acquisition to study the impact on the utility level of workers on this basis,which contributes to the implementation of the delayed retirement policy and the promotion of commercial annuity development with practical significance.This paper classifies delayed retirement policies into two types: direct delay of retirement age by five years and gradual retirement,and subdivides gradual retirement into two types of retirement age and retirement program graduation.This paper focuses on the utility changes of workers’ retirement cycles,introducing their consumption,investment,annuity acquisition and home reverse mortgage insurance factors in the process.A life-cycle model that integrates mortality risk and interest rate risk is first developed.Then,based on the CRRA utility model,we analyze the utility changes of workers under different delayed retirement policies,and also analyze the impact of annuity acquisition behavior.Finally,the paper analyzes the effects of risk aversion coefficients and annuity surcharge rates on the utility of workers during their retirement period.The results show that,firstly,whatever delayed retirement policy is adopted,it can promote the increase of workers’ utility level to some extent.However,in terms of the rate of increase of utility,the gradual approach of using retirement scheme under the gradual retirement policy is more beneficial to the utility value of workers than the gradual approach of using retirement age.Second,the acquisition of annuities helps to increase the utility level of workers.The higher the share of wealth that workers spend on purchasing pension annuities at the moment of retirement,the higher their utility level,but the increase of their utility level shows a slow,fast and slow increase with the share of annuities.Moreover,if the retirement age is directly delayed by five years,the purchase of deferred annuities is more beneficial to the utility of the worker.Finally,the utility increase through the purchase of annuities is not significant for the older retirees.Overall,this paper demonstrates to a certain extent that the delayed retirement policy has a positive effect on the utility level of workers,and the purchase of annuities by workers is also conducive to increasing utility,which provides an explanation for the feasibility of implementing the delayed retirement policy in China and also provides a basis for developing the commercial annuity market.In addition,the introduction of home reverse mortgage insurance adds to the possibility of the development of the insurance market.