Using the pension multiple to measure retirement outcomes

Aaron Minney, Zili Zhu, Ying Guo, Jiaming Li, Peter Toscas, Bonsoo Koo, Athanasios A. Pantelous

Research output: Contribution to journalArticleResearchpeer-review


This paper presents a simple and intuitive measure of retirement income adequacy: the Pension Multiple which captures and quantifies the level of income for each future retirement year as a multiple of the government-provided social security pension. This Pension Multiple at each future retirement year is then mortality-weighted to produce an average Pension Multiple for the entire retirement. An expected shortfall from this average Pension Multiple is introduced to measure the potential shortfall at each future retirement year from the average Pension Multiple. A single measure of retirement income and potential shortfall is then calculated as the averaged Pension Multiple minus the averaged expected shortfall, which is called the adjusted Pension Multiple. Finally, any residual estate is also included as part of the retirement income adequacy measure. The Pension Multiple and estate residue can be calculated by any forecast model for future retirement income. In this paper, we use a robust stochastic forecasting model to demonstrate the effectiveness of using the Pension Multiple to measure and compare different retirement income strategies.

Original languageEnglish
Article number103149
Number of pages8
JournalFinance Research Letters
Publication statusPublished - Oct 2022


  • Bequest
  • Drawdown strategy
  • Pension Multiple
  • Retirement Income
  • Shortfall
  • Stochastic forecasting
  • Superannuation

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