TY  - UNPD
A1  - Marekwica, Marcel
A1  - Maurer, Raimond
T1  - How unobservable bond positions in retirement accounts affect asset allocation
T2  - Universität Frankfurt am Main. Fachbereich Wirtschaftswissenschaften: [Working paper series / Finance and accounting] Working paper series, Finance & Accounting ; No. 176
N2  - Many tax-codes around the world allow for special taxable treatment of savings in retirement accounts. In particular, profits in retirement accounts are usually tax exempt which allow investors to increase an asset’s return by holding it in such a retirement account. While the existing literature on asset location shows that risk-free bonds are usually the preferred asset to hold in a retirement account, we explain how the tax exemption of profits in retirement accounts affects private investors’ asset allocation. We show that total final wealth can be decomposed into what the investor would have earned in a taxable account and what is due to the tax exemption of profits in the retirement account. The tax exemption of profits can thus be considered a tax-gift which is similar to an implicit bond holding. As this tax-gift’s impact on total final wealth decreases over time, so does the investor’s equity exposure.
T3  - Working paper series / Johann-Wolfgang-Goethe-Universität Frankfurt am Main, Fachbereich Wirtschaftswissenschaften : Finance & Accounting - 176 
KW  - asset location
KW  - asset allocation
KW  - tax-deferred accounts
KW  - tax exempt accounts
KW  - Rentner
KW  - Asset-Backed Security
KW  - Ersparnis
KW  - Steuer
Y1  - 2007
UR  - http://publikationen.ub.uni-frankfurt.de/frontdoor/index/index/docId/1137
UR  - https://nbn-resolving.org/urn:nbn:de:hebis:30-43631
N1  - First draft: March 2006; this version: March 1, 2007
PB  - Univ., Fachbereich Wirtschaftswiss.
CY  - Frankfurt am Main
ER  -