IDEAS home Printed from https://ideas.repec.org/p/wil/wileco/2008-10.html
   My bibliography  Save this paper

The Trajectory of Wealth in Retirement

Author

Listed:

Abstract

In this paper, we develop a measure of household resources that converts total financial, nonfinancial, and annuitized assets into an expected annual amount of wealth per person in retirement. We use this measure, which we call "annualized comprehensive wealth," to investigate spend-down behavior among a panel of older households in the Health and Retirement Study (HRS) from 1998 to 2006. Our analysis indicates that for most retired households, comprehensive wealth balances decline much more slowly than their remaining life expectancies, so that the predominate trend is for real annualized wealth actually to rise significantly with age over the course of retirement. Comparing the estimated age profiles for annualized wealth with profiles simulated from several different life cycle models, we find that a model that takes into account uncertain longevity, random medical expenses, and intended bequests lines up best with the broad patterns of rising annualized wealth in the HRS.

Suggested Citation

  • David Love & Michael Palumbo & Paul Smith, 2008. "The Trajectory of Wealth in Retirement," Department of Economics Working Papers 2008-10, Department of Economics, Williams College.
    • Handle: RePEc:wil:wileco:2008-10
    as

    Download full text from publisher

    File URL: https://web.williams.edu/Economics/wp/lovetrajectory_lps2008.pdf
    File Function: Full text
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    Retirement wealth; life-cycle saving; mortality risk; precautionary saving; bequests; risk and uncertainty.;
    All these keywords.

    JEL classification:

    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • I10 - Health, Education, and Welfare - - Health - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wil:wileco:2008-10. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Greg Phelan (email available below). General contact details of provider: https://edirc.repec.org/data/edwilus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.