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The Retirement‐Savings Puzzle Reviewed: The Role Of Housing And Bequests

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  • Eduard Suari‐Andreu
  • Rob Alessie
  • Viola Angelini

Abstract

The so‐called retirement‐savings puzzle is a phenomenon by which, contrary to what the standard life‐cycle model predicts, households do not run down their wealth significantly during retirement. In this review paper, we survey the literature on the retirement‐savings puzzle and we connect it with the literature on housing equity during retirement. To establish a link between these two streams of literature, we use as a framework the work of Nakajima and Telyukova (2013a, Home equity in retirement, UCSD Working Paper) and Nakajima and Telyukova (2017, Reverse mortgage loans: a quantitative analysis, Journal of Finance 72: 911–950), who find that home‐ownership interacts with factors that explain the retirement‐savings puzzle, notably with the bequest motive. We complement the results by Nakajima and Telyukova by relating them to the literature on altruistic bequests, strategic bequests and housing as a commitment device, all of which give further insights on the connection between home‐ownership and bequests. We complement our review of the literature with descriptive evidence using the Netherlands as a case study.

Suggested Citation

  • Eduard Suari‐Andreu & Rob Alessie & Viola Angelini, 2019. "The Retirement‐Savings Puzzle Reviewed: The Role Of Housing And Bequests," Journal of Economic Surveys, Wiley Blackwell, vol. 33(1), pages 195-225, February.
    • Handle: RePEc:bla:jecsur:v:33:y:2019:i:1:p:195-225
    DOI: 10.1111/joes.12257
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    Cited by:

    1. Hanewald, Katja & Bateman, Hazel & Fang, Hanming & Wu, Shang, 2020. "Is there a demand for reverse mortgages in China? Evidence from two online surveys," Journal of Economic Behavior & Organization, Elsevier, vol. 169(C), pages 19-37.
    2. Florian Bartsch & Florian Buhlmann & Karolin Kirschenmann & Carolin Schmidt, 2021. "Is There a Need for Reverse Mortgages in Germany? Empirical Evidence and Policy Implications," EconPol Policy Reports 31, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    3. Edouard Augustin Ribes, 2021. "How does education influence individuals' use of bequests as a long-term care insurance?," Working Papers hal-03498481, HAL.
    4. Wei Han & Ping Wang & Hongjie Dong, 2020. "Influence of Egoistic and Altruistic Bequest Motives on the Willingness to Participate in Reverse Mortgages in China," Asian Economic Journal, East Asian Economic Association, vol. 34(4), pages 430-463, December.
    5. GLUMAC Brano & CABALLE FABRA Gemma, 2018. "Housing in a Mobile World: A Definition of Flexible Housing and the Classification of Solutions," LISER Working Paper Series 2018-16, Luxembourg Institute of Socio-Economic Research (LISER).
    6. Bonekamp, Johan & van Soest, Arthur, 2022. "Evidence of behavioural life-cycle features in spending patterns after retirement," The Journal of the Economics of Ageing, Elsevier, vol. 23(C).
    7. Charles Yuji Horioka & Luigi Ventura, 2024. "Do the Retired Elderly in Europe Decumulate Their Wealth? The Importance of Bequest Motives, Precautionary Saving, Public Pensions, and Homeownership," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 70(1), pages 187-212, March.
    8. Makoto Nakajima & Irina A. Telyukova, 2020. "Home Equity In Retirement," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 61(2), pages 573-616, May.
    9. Suari-Andreu, Eduard, 2021. "Housing and household consumption: An investigation of the wealth and collateral effects," Journal of Housing Economics, Elsevier, vol. 54(C).
    10. Geoffrey J Warren, 2022. "Design of comprehensive income products for retirement using utility functions," Australian Journal of Management, Australian School of Business, vol. 47(1), pages 105-134, February.

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