spCF: Second Pillar Cash Flows
In sstoeckl/pensionfinanceLi: Optimal Pension Decisions in Liechtenstein

Description Usage Arguments Value Examples

Cash Flows are generated for the payment phase of the second pillar, starting at ret_age until 122 because that is when all our ficticious persons have died. Contributions to the second pillar are doubled by the employer

spCF(
  ret_age = 65,
  nu2,
  c_age,
  c2,
  li,
  lg,
  w2 = setNames(c(0.3, 0.3, 0.3, 0.1, 0), c("msci", "b10", "recom", "libor", "infl")),
  ret,
  retr,
  s2,
  rho2,
  warnings = TRUE
)

`ret_age`	optional, retirement age, can be set anywhere between 60 and 70 (default: 65)
`nu2`	fraction of second pillar savings that is converted to life-long pension
`c_age`	the investor's current age (assuming birthday is calculation-day)
`c2`	second pillar savings as fraction of gross income (still missing: health, a-fonds-perdu payments)
`li`	gross labor income at time 0 (in the last year before birthday)
`lg`	labor growth rate (in real terms, constant)
`w2`	portfolio allocation (assumed to be fixed and not influenced by the decision maker)
`ret`	investment return scenarios (nominal)
`retr`	investment return scenarios (real)
`s2`	savings in second pillar as of t=0
`rho2`	conversion factor in second pillar for regular retirement age
`warnings`	optional: should warnings be given? (default=TRUE)

List with elements: - a vector of lumpsum spendings (length = number of scenarios) and - a matrix with annuity payments starting at ret_age until 122 (rows) with number of columns equal to the number of scenarios - vector of wealth levels at retirement

data(ret); data(retr)
sp_ex <- spCF(ret_age=65,nu2=.5,c_age=42,c2=.12,
           li=100000,lg=0.01,
           ret=ret[,,1:10],retr=retr[,,1:10],s2=300000,rho2=0.05)
sp_ex2 <- spCF(ret_age=65,nu2=0.01,c_age=64,c2=0.01,li=0,lg=0.01,
w2=setNames(c(1,0,0,0,0),c("msci","b10","recom","libor","infl")),
           ret=ret[,,1:10],retr=retr[,,1:10],s2=0,rho2=0.0000001)