LONGEVITY, HEALTH AND HOUSING RISKS MANAGEMENT IN RETIREMENT MICHAUD ST-AMOUR

girard

However, the emphasis of Nakajima and Telyukova (2017) on the effects of the Great Recession, and of the 2013 reform on RMR demand differs from ours. [...] 19 The RMR is terminated when the house is sold at time t ≥ 1, and the nominal amount due by the borrower Lijt in (6b) compounds the interests given by the premia πRij over the risk-free rate r. [...] The premia is household-specific and accounts for the health status(es) of all member(s) since the latter determine(s) the decision to sell. [...] (2014) set the equivalent scale equal to 1.3 for couples and find that it is a key parameter in capturing the change in consumption required to compensate the death of a spouse as a determinant of annuity demand. [...] In particular, the HELOC cannot be more than 65% of the value of the house (the Value test), while the HELOC plus the mortgage balance cannot be more than 80% of the value of the house (the LTV test).37 We implement both of these rules for (ωh h 380 , ω1 ).