Pension Portfolio Optimization and Impact of Debt Defaults

Usually, the government offers two pension methods, a lumpsum buyout or an annual pension. In this paper, we provide effective method to evaluate these methods. Initially, constructed portfolio consisting of five popular assets, such as tech giants and ETFs. Then use Fama-French 3-factor model calculate expected returns every asset. The Sharpe Ratio is standard make choice that accepts with without Except for Ratios, also took debt default retirement ages into consideration. Government defaults contain types, partial defaults, full defaults. These different kinds can have significant impact on choice. With method, could obtain decision boundary Investors utilize decide whether accept by themselves.