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Do Retirees Want Constant, Increasing, or Decreasing Consumption?

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  • Anqi Chen
  • Alicia H. Munnell

Abstract

Whether households prefer a constant, increasing, or decreasing path of consumption in retirement has important implications for our understanding of retirement adequacy. Financial planners and researchers have often assumed that retirees would like to maintain their pre-retirement standard of living. However, several studies suggest that retired households decrease their consumption over time. This project builds on the existing literature by: 1) examining retirement consumption over longer periods; 2) using wealth to separate constrained and unconstrained households in order to analyze whether declines in consumption are driven by necessity or preferences; and 3) exploring whether, within unconstrained households, those with steeper mortality profiles are more likely to front-load consumption.

Suggested Citation

  • Anqi Chen & Alicia H. Munnell, 2021. "Do Retirees Want Constant, Increasing, or Decreasing Consumption?," Working Papers, Center for Retirement Research at Boston College wp2021-21, Center for Retirement Research.
    • Handle: RePEc:crr:crrwps:wp2021-21
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    File URL: https://crr.bc.edu/working-papers/do-retirees-want-constant-increasing-or-decreasing-consumption/
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    Cited by:

    1. Daniel H. Cooper & Barry Z. Cynamon & Steven Fazzari, 2023. "Sustainable Consumption and the Comprehensive Economic Well-Being of American Households," Working Papers 23-5, Federal Reserve Bank of Boston.

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