Building a pension portfolio based on modeling the structure of pension savings

Abstract

Subject. The study investigates the process of building a pension portfolio based on modeling the structure of pension savings. Objectives. The aim is to develop a science-based approach to the formation of an investment portfolio of pension savings of private investors by modeling the structure of pension savings, taking into account risk-orientation tools and profitability in a changing financial market environment to obtain substantial retirement income through self-accumulation. Methods. The study applies general scientific methods of cognition, economic and statistical methods of information processing, methods of systems, comparative, functional, and factor analysis with the construction of analytical models based on the synthesis of modern scientific methods of cognition of economic processes. The study also employs graphic methods and modeling technique. Results. The paper presents the dependence of investment indicators, considering the term of investment and investment contributions, demonstrating the major trends that the higher the desired pension level, the earlier it is necessary to start forming an investment portfolio. As part of pension savings modeling, the paper also proposes the dependence of investment indicators that include tax benefits, enabling to determine the investment returns due to the tax deduction. Conclusions. The proposed approach will increase the efficiency of placement of pension savings that will lead to the growth of people’s prosperity. Moreover, finding the optimal balance between these criteria would not only preserve, but also increase pension capital.