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Are We Saving Enough? Households and Retirement

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  • Doug Campbell
  • John A. Weinberg

Abstract

John Weinberg and Doug Campbell examine the extent to which Americans are financially prepared for retirement. Careful studies on American saving habits show that most families nearing retirement are saving both adequately and optimally---or the best they can given their lifetime expected incomes. However, estimates about savings adequacy depend on the assumption that entitlement program benefits will be forthcoming. Population aging and the retirement of baby boomers challenge that assumption and may portend a future in which some people will need to consume less than they would otherwise.

Suggested Citation

  • Doug Campbell & John A. Weinberg, 2015. "Are We Saving Enough? Households and Retirement," Economic Quarterly, Federal Reserve Bank of Richmond, issue 2Q, pages 99-123.
    • Handle: RePEc:fip:fedreq:00031
    DOI: 10.21144/eq1010202
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    References listed on IDEAS

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    1. Douglas W. Elmendorf & Louise M. Sheiner, 2000. "Should America Save for Its Old Age? Fiscal Policy, Population Aging, and National Saving," Journal of Economic Perspectives, American Economic Association, vol. 14(3), pages 57-74, Summer.
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    3. Richard H. Thaler & Shlomo Benartzi, 2004. "Save More Tomorrow (TM): Using Behavioral Economics to Increase Employee Saving," Journal of Political Economy, University of Chicago Press, vol. 112(S1), pages 164-187, February.
    4. David A. Love & Lucy C. McNair & Paul A. Smith, 2007. "Do households have enough wealth for retirement?," Finance and Economics Discussion Series 2007-17, Board of Governors of the Federal Reserve System (U.S.).
    5. Martin Lettau & Sydney C. Ludvigson, 2004. "Understanding Trend and Cycle in Asset Values: Reevaluating the Wealth Effect on Consumption," American Economic Review, American Economic Association, vol. 94(1), pages 276-299, March.
    6. Alicia H. Munnell & Mauricio Soto, 2006. "What Replacement Rates Do Households Actually Experience In Retirement?," Working Papers, Center for Retirement Research at Boston College wp2005-10, Center for Retirement Research.
    7. Annamaria Lusardi & Olivia Mitchell, 2007. "Financial Literacy and Retirement Planning: New Evidence from the Rand American Life Panel," Working Papers wp157, University of Michigan, Michigan Retirement Research Center.
    8. Douglas W. Elmendorf & Louise Sheiner, 2000. "Should America save for its old age? Population aging, national saving, and fiscal policy," Finance and Economics Discussion Series 2000-03, Board of Governors of the Federal Reserve System (U.S.).
    9. Edward M. Gramlich, 2005. "A first step in dealing with growing retirement costs : a speech at the Spring 2005 Banking and Finance Lecture, Widener University, Chester, Pennsylvania, April 21, 2005," Speech 104, Board of Governors of the Federal Reserve System (U.S.).
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