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What is an Adequate Standard of Living During Retirement?

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  • Binswanger, J.

    (Tilburg University, Center For Economic Research)

  • Schunk, D.

Abstract

Many economists and policy-makers argue that households do not save enough to maintain an adequate standard of living during retirement. However, there is no consensus on the answer to the underlying question what this standard should be, despite the fact that it is crucial for the design of saving incentives and pension reforms. We address this question with a randomized survey design, individually tailored to each respondent's financial situation, and conducted both in the U.S. and the Netherlands. Key findings are that adequate levels of retirement spending exceed 80 percent of working life spending for a majority of respondents, minimum acceptable replacement rates depend strongly on income, and households in the Netherlands are much more risk averse than U.S. households.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Binswanger, J. & Schunk, D., 2008. "What is an Adequate Standard of Living During Retirement?," Discussion Paper 2008-82, Tilburg University, Center for Economic Research.
    • Handle: RePEc:tiu:tiucen:44f1f600-7b46-47d2-a6ec-b32e206593c0
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    References listed on IDEAS

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    More about this item

    Keywords

    Life cycle preferences; pension reform; replacement rates; retirement saving;
    All these keywords.

    JEL classification:

    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions

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