Many may not be thinking through the consequences, Professor Shoven said.
|
|
In an interview, Professor Shoven said some affluent people might not need to worry about these issues.
|
|
Shoven tested the impact of working longer on a wide range of incomes and investment returns; assuming investment gains would match inflation.
|
|
But married couples should not assume this is the best path if one spouse has a short life expectancy, Professor Shoven said.
|
|
Most important, said Shoven, is to delay taking Social Security, which grows about 8 percent a year with each year of delay up to age 70.
|
|
On the other hand, Social Security is itself an annuity — one based on outdated estimates of American longevity, Professor Shoven says, making it a better deal than can be found on the commercial market.
|
|
A recent study by Shanthi Ramnath, John B. Shoven, and Sita N. Slavov found that over a four-year period, around 4 percent of older workers went into business for themselves, often with reduced hours.
|
|
"Fifteen years is really just around the corner for people planning their retirements," said John B. Shoven, a Stanford economist who is also affiliated with the Hoover Institution and the National Bureau of Economic Research.
|
|
"The terms for these deferrals began to be designed in the mid-1950s, and mortality was so different and interest rates were so different then," said John Shoven, a Stanford University economics professor and an authority on Social Security.
|
|
The study, a National Bureau of Economic Research working paper, was written by John B. Shoven, a Stanford economist, and three of his former students: Gila Bronshtein, an associate at Cornerstone Research; Jason Scott, a retirement expert at Financial Engines; and Sita N. Slavov, a professor at George Mason University.
|
|
John B. Shoven (born May 24, 1947) is the former Trione Director of the Stanford Institute for Economic Policy Research, the Charles R. Schwab Professor of Economics at Stanford University, the Buzz and Barbara McCoy Senior Fellow at the Hoover Institution and a research associate of the National Bureau of Economic Research. He specializes in public finance and corporate finance and has published on social security, corporate and personal taxation, mutual funds, pension plans and applied general equilibrium economics. Shoven was born in 1947. Shoven has been at Stanford since 1973, serving as chairman of the economics department from 1986 to 1989, director of the Stanford Institute for Economic Policy Research (SIEPR) [formerly Center for Economic Policy Research] from 1989 to 1993 and 1999 to 2015, and dean of the School of Humanities and Sciences from 1993 to 1998.
|
|
George Shultz was a key player in its inception. The current director of the institute is Mark Duggan; past directors include John Shoven, Michael Boskin, Lawrence J. Lau, and James Sweeney. SIEPR is a partner on the data aggregator website USAFacts.org.
|
|
The deciding factor is apparently the effective tax rate on the asset's income. For the same reason, tax-exempt bonds, national savings certificates and other similar tax- privileged securities are best located in fully taxable accounts.James Poterba, John Shoven & Clemens Sialm, “Asset Location for Retirement Savers”, Chapter 10, Private Pensions and Public Policies Shoven and SialmJohn B. Shoven and Clemens Sialm, “Asset Location in Tax-Deferred and Conventional Savings Accounts”, NBER Working Paper No. 7192, June 1999, JEL No. G11,G23,H24 provided an analysis of the decision point when income producing equities should be sheltered and optimal portfolio choice for each type of account. Individual stocks, passive index funds, or exchange-traded funds are generally regarded as tax-efficient and, consequently, better placed in taxable accounts, when more heavily taxed income generating assets, such as bonds, real estate investment trusts, and so on, are available for secretion in a tax sheltered location.
|
|
2005, citing Scarf 1967b). His students elaborated the Scarf algorithm into a tool box, where the price vector could be solved for any changes in policies (or exogenous shocks), giving the equilibrium ‘adjustments’ needed for the prices. This method was first used by Shoven and Whalley (1972 and 1973), and then was developed through the 1970s by Scarf’s students and others.A list of Scarf's students appears in Kehoe et alia (2005: 5): Ph.D. Students: Terje Hansen, Timothy Kehoe, Rolf Mantel, Michael J. Todd, Ludo van der Heyden and John Whalley, and Andrew Feltstein, Ana Matirena-Mantel, Marcus Miller, Donald Richter, Jaime Serra-Puche, John Shoven and John Spencer.
|
|
Shoven served as a consultant for the U.S. Treasury Department from 1975 to 1988. The author of more than one hundred professional articles and eighteen books, notably The Real Deal: The History and Future of Social Security and Putting Our House in Order: A Guide to Social Security and Health Care Reform, he has been a visiting professor at Harvard University, the London School of Economics, Kyoto University, and Monash University. In 1995 he was elected a fellow of the American Academy of Arts and Sciences. Shoven is a University of California, San Diego alumnus earning a B.A. in Physics from University of California, San Diego and a Ph.D in Economics from Yale University.
|
|
For evidence of the increased use of share repurchases, see Bagwell, Laurie Simon and John Shoven, "Cash Distributions to Shareholders" 1989, Journal of Economic Perspectives, Vol. 3 No. 3, Summer, 129–140. It is relatively easy for insiders to capture insider- trading-like gains through the use of "open market repurchases". Such transactions are legal and generally encouraged by regulators through safe harbours against insider trading liability.
|
|
B. Shoven, The Real Deal, 1999, p. 190. The National Commission on Social Security Reform (NCSSR), chaired by Alan Greenspan, was empaneled to investigate the long-run solvency of Social Security. The 1983 Amendments to the SSA were based on the NCSSR's Final Report. The NCSSR recommended enacting a six-month delay in the COLA and changing the tax-rate schedules for the years between 1984 and 1990.
|
|
Until the 1970s general equilibrium analysis remained theoretical. With advances in computing power and the development of input–output tables, it became possible to model national economies, or even the world economy, and attempts were made to solve for general equilibrium prices and quantities empirically. Applied general equilibrium (AGE) models were pioneered by Herbert Scarf in 1967, and offered a method for solving the Arrow–Debreu General Equilibrium system in a numerical fashion. This was first implemented by John Shoven and John Whalley (students of Scarf at Yale) in 1972 and 1973, and were a popular method up through the 1970s.
|
|