Abstract
Retirement benefit guarantees can ensure a minimum standard of living in retirement. I propose a framework to discuss the design of such guarantees. The model features a standard life-cycle setting, in which individual agents' choices can have negative external effects on public finances, whenever their retirement consumption drops below a minimum level. Within this framework, I derive two alternative forms of intervention that can efficiently deliver a minimum standard of living to retirees. According to the first policy, agents use part of their accumulated assets to purchase a claim providing a fixed income stream for the duration of their life. According to the second policy, they purchase an appropriately structured portfolio insurance policy.
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