Effects of Stock Market Fluctuations on the Adequacy of Retirement Wealth Accumulation
AbstractThis paper examines the relation between fluctuations in the aggregate value of equities and the adequacy of households’ saving for retirement. We find that many and perhaps most households appear to be saving adequate amounts for retirement, but almost no link between stock values and the adequacy of retirement saving. Historical variation in equity values and ownership correlates poorly with historical variation in the adequacy of saving. Even a simulated 40 percent decline in stocks has little effect on the adequacy of saving. The results occur because equities are concentrated among households with significant amounts of other wealth.
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Bibliographic InfoPaper provided by Center for Retirement Research in its series Working Papers, Center for Retirement Research at Boston College with number 2004-16.
Length: 37 pages
Date of creation: May 2004
Date of revision:
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More information through EDIRC
retirement; saving; stocks; equities;
Find related papers by JEL classification:
- D91 - Microeconomics - - Intertemporal Choice - - - Intertemporal Household Choice; Life Cycle Models and Saving
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-08-20 (All new papers)
- NEP-FIN-2005-08-20 (Finance)
- NEP-FMK-2005-08-20 (Financial Markets)
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