A New Look At The Wealth Adequacy Of Older U.S. Households
We examine the current wealth adequacy of older U.S. households using the 1998-2006 waves of the Health and Retirement Study (HRS). We find that the median older U.S. household is reasonably well situated, with a ratio of comprehensive net wealth to present value poverty-line wealth of about 3.9 in 2006. About 18 percent of households, however, have less wealth than would be needed to generate 150 percent of poverty-line income over their expected future lifetimes. We see similar patterns of wealth adequacy when we examine ratios of annualized comprehensive wealth to pre-retirement earnings. Comparing the leading edge of the baby boomers in 2006 to households of the same age in 1998, we find that the baby boomers show slightly less wealth, in real terms, than their elders did, but still appear to have adequate resources at the median. Moreover, we find a rising age profile of annualized wealth, even within households over time and after controlling for other factors, suggesting that older households are not spending their wealth as quickly as their survival probabilities are falling. Copyright 2008 The Authors. Journal compilation 2008 International Association for Research in Income and Wealth Published by Blackwell Publishing.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 54 (2008)
Issue (Month): 4 (December)
|Contact details of provider:|| Web page: http://www.blackwellpublishing.com/journal.asp?ref=0034-6586|
More information through EDIRC
|Order Information:||Web: http://www.blackwellpublishing.com/subs.asp?ref=0034-6586|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Olivia S. Mitchell, 1999.
"New Evidence on the Money's Worth of Individual Annuities,"
American Economic Review,
American Economic Association, vol. 89(5), pages 1299-1318, December.
- Olivia S. Mitchell & James M. Poterba & Mark J. Warshawsky, 1997. "New Evidence on the Money's Worth of Individual Annuities," NBER Working Papers 6002, National Bureau of Economic Research, Inc.
- Olivia S. Mitchell & James M. Poterba & Mark J. Warshawsky, . "New Evidence on the Money's Worth of Individual Annuities," Pension Research Council Working Papers 97-9, Wharton School Pension Research Council, University of Pennsylvania.
- Robert Haveman & Karen Holden & Barbara Wolfe & Andrei Romanov, 2005.
"Assessing the Maintenance of Savings Sufficiency Over the First Decade of Retirement,"
CESifo Working Paper Series
1567, CESifo Group Munich.
- Robert Haveman & Karen Holden & Andrei Romanov & Barbara Wolfe, 2007. "Assessing the maintenance of savings sufficiency over the first decade of retirement," International Tax and Public Finance, Springer, vol. 14(4), pages 481-502, August.
- Jeffrey R. Brown & James M. Poterba, 1999. "Joint Life Annuities and Annuity Demand by Married Couples," NBER Working Papers 7199, National Bureau of Economic Research, Inc.
- Robert Haveman & Karen Holden & Barbara Wolfe & Shane Sherlund, 2006. "Do Newly Retired Workers in the United States Have Sufficient Resources to Maintain Well-Being?," Economic Inquiry, Western Economic Association International, vol. 44(2), pages 249-264, April.
- Gustman, Alan L. & Steinmeier, Thomas L., 1999.
"Effects of pensions on savings: analysis with data from the health and retirement study,"
Carnegie-Rochester Conference Series on Public Policy,
Elsevier, vol. 50(1), pages 271-324, June.
- Alan L. Gustman & Thomas L. Steinmeier, 1998. "Effects of Pensions on Saving: Analysis with Data from the Health and Retirement Study," NBER Working Papers 6681, National Bureau of Economic Research, Inc.
- Willaim G. Gale & Karen M. Pence, 2006. "Are Successive Generations Getting Wealthier, and If So, Why?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 37(1), pages 155-234.
- Annamaria Lusardi & Olivia S. Mitchell, 2006.
"Baby Boomer Retirement Security: The Roles of Planning, Financial Literacy, and Housing Wealth,"
CeRP Working Papers
54, Center for Research on Pensions and Welfare Policies, Turin (Italy).
- Lusardi, Annamaria & Mitchell, Olivia S., 2007. "Baby Boomer retirement security: The roles of planning, financial literacy, and housing wealth," Journal of Monetary Economics, Elsevier, vol. 54(1), pages 205-224, January.
- Annamaria Lusardi & Olivia S. Mitchell, 2006. "Baby Boomer Retirement Security: the Roles of Planning, Financial Literacy, and Housing Wealth," NBER Working Papers 12585, National Bureau of Economic Research, Inc.
- Lusardi, Annamaria & Mitchell, Olivia S., 2006. "Baby boomer retirement security: The roles of planning, financial literacy, and Housing wealth," CFS Working Paper Series 2006/20, Center for Financial Studies (CFS).
- Annamaria Lusardi & Olivia S. Mitchell, 2006. "Baby Boomer Retirement Security: The Roles of Planning, Financial Literacy, and Housing Wealth," Working Papers wp114, University of Michigan, Michigan Retirement Research Center.
- Martin Browning & Annamaria Lusardi, 1995.
"Household Saving: Micro Theories and Micro Facts,"
Department of Economics Working Papers
1995-02, McMaster University.
- Bernheim, B. Douglas, 1987. "The economic effects of social security : Toward a reconciliation of theory and measurement," Journal of Public Economics, Elsevier, vol. 33(3), pages 273-304, August.
- 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.
- John Karl Scholz & Ananth Seshadri & Surachai Khitatrakun, 2006.
"Are Americans Saving "Optimally" for Retirement?,"
Journal of Political Economy,
University of Chicago Press, vol. 114(4), pages 607-643, August.
- Engen, Eric & Gale, William & Uccello, Cori, 1999. "The Adequacy of Household Saving," MPRA Paper 56442, University Library of Munich, Germany.
- Shiller Robert J., 2006. "Long-Term Perspectives on the Current Boom in Home Prices," The Economists' Voice, De Gruyter, vol. 3(4), pages 1-11, March.
- Michael Hurd & Susann Rohwedder, 2006. "Alternative Measures of Replacement Rates," Working Papers wp132, University of Michigan, Michigan Retirement Research Center.
When requesting a correction, please mention this item's handle: RePEc:bla:revinw:v:54:y:2008:i:4:p:616-642. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing)or (Christopher F. Baum)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.