It is my contention that one of the benefits of a pension is that it provides a system for age-averaging.

Imagine three people, each born five years apart (say 1960, 1965 and 1970). These three people each invest the same amount of (inflation adjusted) money in the exact same way (e.g., 80% stocks/20% bonds in year #1). But because of the various market cycles, it is quite likely that the return after 30 years (and after that into retirement) will be different for each person, perhaps dramatically so.

The first question is whether there is any available analysis for this type of situation, I suspect there may be, but I couldn't find it.

Beyond that, are there sources of data which would allow me to do my own analysis? I think I would need historical inflation rates, stock returns and "bond" returns, each a month at a time.


You could use any of various financial APIs (e.g., Yahoo finance) to get prices of some reference stock and bond index funds. That would be a reasonable approximation to market performance over a given time span.

As for inflation data, just googling "monthly inflation data" gave me two pages with numbers that seem to agree and go back to 1914. If you want to double-check their numbers you could go to the source at the BLS.

As for whether any existing analysis exists, I'm not sure exactly what you mean. I don't think you need to do much analysis to show that stock returns are different over different time periods.

  • by existing analysis, I'm wondering whether anyone has already researched pensions from the perspective I've outlined. Frankly, I'd really rather read someone else's research than do my own. – Ðаn Apr 11 '15 at 17:57
  • @Dan: That I don't know. Still, though, I'm not sure what the research would say. If a pension provides a guaranteed benefit that doesn't vary over time, but investment returns do vary over time, then it seems obvious that they differ in that way, and you don't need to do a lot of heavy data-gathering to convince people that those two things are true. – BrenBarn Apr 11 '15 at 19:34
  • the "guaranteed benefit" is a (usual) feature of a particular pension; one could imagine the benefit being a percentage of the overall plan value--say something like a mutual fund. Again, the thrust of this particular question is evidence/data supporting (or refuting) my "time averaging" hypothesis. – Ðаn Apr 11 '15 at 20:18

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