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Crash and Wait? The Impact of the Great Recession on the Retirement Plans of Older Americans

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  • Brooke Helppie McFall

Abstract

This study uses data from pre- and post-crash surveys from the Cognitive Economics study to examine the impact of recent stock and labor market wealth losses on the planned retirement ages of older Americans. Regression estimates imply that the average wealth loss between July 2008 and May/June 2009 is associated with an increase in planned retirement age of approximately 2.5 months. Furthermore, pessimism about future stock market returns is found to amplify the impact of wealth losses on retirement timing.

Suggested Citation

  • Brooke Helppie McFall, 2011. "Crash and Wait? The Impact of the Great Recession on the Retirement Plans of Older Americans," American Economic Review, American Economic Association, vol. 101(3), pages 40-44, May.
  • Handle: RePEc:aea:aecrev:v:101:y:2011:i:3:p:40-44
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    References listed on IDEAS

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    1. Purvi Sevak, 2002. "Wealth Shocks and Retirement Timing: Evidence from the Nineties," Working Papers wp027, University of Michigan, Michigan Retirement Research Center.
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    Cited by:

    1. Kathleen Arano & Carl Parker, 2016. "The great recession and changes in faculty expected retirement age," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 40(1), pages 127-136, January.
    2. Zou, Tieding, 2017. "延迟退休的制约因素、政策效果与动态研究方法评价
      [Restriction, Policy Effect and Dynamic Research Method to Delay Retirement]
      ," MPRA Paper 85556, University Library of Munich, Germany, revised 30 Jan 2018.
    3. Le Blanc, Julia & Scholl, Almuth, 2017. "Optimal Savings For Retirement: The Role Of Individual Accounts," Macroeconomic Dynamics, Cambridge University Press, vol. 21(06), pages 1361-1388, September.
    4. Frijters, Paul & Johnston, David W. & Shields, Michael A. & Sinha, Kompal, 2015. "A lifecycle perspective of stock market performance and wellbeing," Journal of Economic Behavior & Organization, Elsevier, vol. 112(C), pages 237-250.
    5. Catalina Amuedo-Dorantes & Susan Pozo, 2015. "The impact of the recession on the wealth of older immigrant and native households in the United States," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 4(1), pages 1-27, December.
    6. Kathleen G. Arano & Carl D. Parker, 2016. "The great recession and changes in faculty expected retirement age," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 40(1), pages 127-136, January.
    7. Andreas Eder, 2016. "The impact of inheritances on the retirement behavior of older Europeans," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 43(2), pages 299-331, May.
    8. repec:bpj:bejeap:v:17:y:2017:i:2:p:21:n:6 is not listed on IDEAS
    9. Crawford, Rowena, 2013. "The effect of the financial crisis on the retirement plans of older workers in England," Economics Letters, Elsevier, vol. 121(2), pages 156-159.
    10. McInerney, Melissa & Mellor, Jennifer M. & Nicholas, Lauren Hersch, 2013. "Recession depression: Mental health effects of the 2008 stock market crash," Journal of Health Economics, Elsevier, vol. 32(6), pages 1090-1104.

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