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Managing Retirement Incomes

Author

Listed:
  • James Banks

    (Department of Economics, University of Manchester, Manchester, United Kingdom)

  • Rowena Crawford

    (Institute for Fiscal Studies, London, United Kingdom)

Abstract

In this article we discuss the state of the literature relating to the decumulation of retirement wealth and the management of retirement incomes. On the one hand, life-cycle models that allow for strong bequest motives and for the effects of medical expense risks have been shown to be able to rationalize retirees’ wealth, income, and consumption trajectories. On the other, studies of individual asset choices and portfolio decisions seem to suggest low levels of financial literacy and engagement as well as non-negligible consequences of age-related cognitive decline on financial decision making. We argue that future work should try to reconcile these two sets of conflicting findings into a coherent and holistic evidence base to inform policy, because issues concerning the management of retirement incomes, and insurance against different risks in retirement more generally, will become increasingly important for future cohorts of retirees.

Suggested Citation

  • James Banks & Rowena Crawford, 2022. "Managing Retirement Incomes," Annual Review of Economics, Annual Reviews, vol. 14(1), pages 181-204, August.
    • Handle: RePEc:anr:reveco:v:14:y:2022:p:181-204
    DOI: 10.1146/annurev-economics-051420-014808
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    Citations

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    Cited by:

    1. Carol Propper & George Stoye & Max Warner, 2023. "The effects of pension reforms on physician labour supply: Evidence from the English NHS," IFS Working Papers W23/26, Institute for Fiscal Studies.

    More about this item

    Keywords

    retirement saving; financial literacy; wealth decumulation;
    All these keywords.

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • G53 - Financial Economics - - Household Finance - - - Financial Literacy

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