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Savings After Retirement: A Survey

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  • Mariacristina De Nardi

    () (Department of Economics, University College London, London WC1H 0AY, United Kingdom
    Research Department, Federal Reserve Bank of Chicago, Chicago, Illinois 60604
    Institute for Fiscal Studies, London WC1E 7AE, United Kingdom
    National Bureau of Economic Research, Cambridge, Massachusetts 02138)

  • Eric French

    () (Department of Economics, University College London, London WC1H 0AY, United Kingdom
    Institute for Fiscal Studies, London WC1E 7AE, United Kingdom
    Centre for Economic and Policy Research, London EC1V 0DX, United Kingdom)

  • John Bailey Jones

    () (Department of Economics, University at Albany, State University of New York, Albany, New York 12222)

Abstract

The saving patterns of retired US households pose a challenge to the basic life-cycle model of saving. The observed patterns of out-of-pocket medical expenses, which rise quickly with age and income during retirement, and heterogeneous life span risk can explain a significant portion of US saving during retirement. However, more work is needed to distinguish these precautionary saving motives from other motives, such as the desire to leave bequests. Progress toward disentangling these motivations has been made by matching other features of the data, such as public and private insurance choices. An improved understanding of whether intended bequests left to children and spouses are due to altruism, risk sharing, exchange motivations, or a combination of these factors is an important direction for future research.

Suggested Citation

  • Mariacristina De Nardi & Eric French & John Bailey Jones, 2016. "Savings After Retirement: A Survey," Annual Review of Economics, Annual Reviews, vol. 8(1), pages 177-204, October.
  • Handle: RePEc:anr:reveco:v:8:y:2016:p:177-204
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    Cited by:

    1. Michelle Maroto, 2018. "Saving, Sharing, or Spending? The Wealth Consequences of Raising Children," Demography, Springer;Population Association of America (PAA), vol. 55(6), pages 2257-2282, December.
    2. Ye Jin Heo, 2018. "Population aging and housing prices: who are we calling old?," NBP Working Papers 288, Narodowy Bank Polski, Economic Research Department.
    3. Eric French & John Bailey Jones & Elaine Kelly & Jeremy McCauley, 2018. "End-of-Life Medical Expenses," Working Paper 18-18, Federal Reserve Bank of Richmond, revised 04 Dec 2018.
    4. John Laitner & Dan Silverman & Dmitriy Stolyarov, 2018. "The Role of Annuitized Wealth in Post-retirement Behavior," American Economic Journal: Macroeconomics, American Economic Association, vol. 10(3), pages 71-117, July.
    5. Niimi, Yoko & Horioka, Charles Yuji, 2019. "The wealth decumulation behavior of the retired elderly in Japan: The relative importance of precautionary saving and bequest motives," Journal of the Japanese and International Economies, Elsevier, vol. 51(C), pages 52-63.
    6. James M. Poterba & Steven F. Venti & David A. Wise, 2015. "What Determines End-of-Life Assets? A Retrospective View," NBER Chapters, in: Insights in the Economics of Aging, pages 127-157, National Bureau of Economic Research, Inc.
    7. Gilad Sorek & Bharat Diwakar, 2017. "Weak Scale Effects in Overlapping Generations Economy," Economics Bulletin, AccessEcon, vol. 37(2), pages 962-969.
    8. Kim, Chul Ju (ed.), 2019. "Aging Societies: Policies and Perspectives," ADBI Books, Asian Development Bank Institute, number 9.
    9. Keiko MURATA, "undated". "Dissaving by the elderly in Japan: Empirical evidence from survey data," ESRI Discussion paper series 346, Economic and Social Research Institute (ESRI).
    10. de Bresser, Jochem, 2019. "Measuring subjective survival expectations – Do response scales matter?," Journal of Economic Behavior & Organization, Elsevier, vol. 165(C), pages 136-156.
    11. Jones, John Bailey & Li, Yue, 2018. "The effects of collecting income taxes on Social Security benefits," Journal of Public Economics, Elsevier, vol. 159(C), pages 128-145.
    12. Päivi Kankaanranta, 2019. "A Cohort-Analysis of Age-Wealth Profile in Finland," Discussion Papers 130, Aboa Centre for Economics.

    More about this item

    Keywords

    bequests; elderly; housing and portfolio choice; insurance; medical expenditure; policy reform;

    JEL classification:

    • D10 - Microeconomics - - Household Behavior - - - General
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household

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