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The Dissaving of Annuity Wealth and Marketable Wealth in Retirement


  • Mirer, Thad W


This paper compares the automatic dissaving of annuity wealth with the discretionary dissaving of marketable wealth that would result from life-cycle consumption behavior by retired persons. In simulations of a life-cycle model based on the isoelastic utility function and realistic parameter values, the author finds that marketable wealth normally would be dissaved more rapidly than annuity wealth. This suggests that empirical findings that show the opposite relation--slow dissaving of marketable wealth being accompanied by faster dissaving of annuity wealth (or total wealth)--should not be interpreted as evidence that supports the life-cycle theory. Copyright 1994 by The International Association for Research in Income and Wealth.

Suggested Citation

  • Mirer, Thad W, 1994. "The Dissaving of Annuity Wealth and Marketable Wealth in Retirement," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 40(1), pages 87-97, March.
  • Handle: RePEc:bla:revinw:v:40:y:1994:i:1:p:87-97

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    References listed on IDEAS

    1. Basu, Kaushik & Foster, James E, 1998. "On Measuring Literacy," Economic Journal, Royal Economic Society, vol. 108(451), pages 1733-1749, November.
    2. George A. Akerlof, 1997. "Social Distance and Social Decisions," Econometrica, Econometric Society, vol. 65(5), pages 1005-1028, September.
    3. Sen, Amartya K, 1976. "Poverty: An Ordinal Approach to Measurement," Econometrica, Econometric Society, vol. 44(2), pages 219-231, March.
    4. Kai-yuen Tsui, 1999. "Multidimensional inequality and multidimensional generalized entropy measures: An axiomatic derivation," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 16(1), pages 145-157.
    5. Atkinson, Tony & Cantillon, Bea & Marlier, Eric & Nolan, Brian, 2002. "Social Indicators: The EU and Social Inclusion," OUP Catalogue, Oxford University Press, number 9780199253494, June.
    6. François Bourguignon & Satya Chakravarty, 2003. "The Measurement of Multidimensional Poverty," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 1(1), pages 25-49, April.
    7. Tsakloglou, Panos & Papadopoulos, Fotis, 2001. "Identifying Population Groups at High Risk of Social Exclusion: Evidence from the ECHP," IZA Discussion Papers 392, Institute for the Study of Labor (IZA).
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    Cited by:

    1. Leung, Siu Fai, 2001. "The life-cycle model of saving with uncertain lifetime and borrowing constraint;: characterization and sensitivity analysis," Mathematical Social Sciences, Elsevier, vol. 42(2), pages 179-201, September.
    2. Sven H. Sinclair & Kent A. Smetters, 2004. "Health Shocks and the Demand for Annuities: Technical Paper 2004-09," Working Papers 15868, Congressional Budget Office.
    3. Siu Fai Leung, 2000. "Why Do Some Households Save So Little? A Rational Explanation," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 3(4), pages 771-800, October.

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