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Comparing Retirement Wealth Trajectories on Both Sides of the Pond

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  • Blundell, Richard William
  • Crawford, Rowena
  • French, Eric Baird
  • Tetlow, Gemma

Abstract

We use comparable data from the US and England to examine similarities and differences in the level and trajectories of assets among households aged 70 and over. We find that in the US assets on average decline gradually with age, while in England older households actually accumulate wealth. These differences appear to be driven largely, though not entirely, by housing wealth: over the period we consider house price growth drove increases in housing wealth in England that more than offset the slow draw down of non-housing wealth. This suggests the illiquid nature of housing is likely to be an important factor in explaining wealth drawdown at older ages. We also consider the potential importance of bequest motives and savings to insure against the risk of medical and long-term care expenses.

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  • Blundell, Richard William & Crawford, Rowena & French, Eric Baird & Tetlow, Gemma, 2016. "Comparing Retirement Wealth Trajectories on Both Sides of the Pond," CEPR Discussion Papers 11219, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:11219
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    Cited by:

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    3. Martin Eling & Omid Ghavibazoo, 2019. "Research on long-term care insurance: status quo and directions for future research," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 44(2), pages 303-356, April.
    4. Makoto Nakajima & Irina A. Telyukova, 2020. "Home Equity In Retirement," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 61(2), pages 573-616, May.
    5. Christian Dudel & Julian Schmied, 2019. "Pension adequacy standards: an empirical estimation strategy and results for the United States and Germany," MPIDR Working Papers WP-2019-003, Max Planck Institute for Demographic Research, Rostock, Germany.
    6. Daniel Barczyk & Matthias Kredler & Sean Fahle, 2019. "Save, Spend or Give? A Model of Housing, Family Insurance, and Savings in Old Age," 2019 Meeting Papers 361, Society for Economic Dynamics.
    7. Eric French & John Bailey Jones & Elaine Kelly & Jeremy McCauley, 2018. "End-of-Life Medical Expenses," Working Paper 18-18, Federal Reserve Bank of Richmond.
    8. , 2020. "Why Does Consumption Fluctuate in Old Age and How Should the Government Insure it?," Opportunity and Inclusive Growth Institute Working Papers 40, Federal Reserve Bank of Minneapolis.
    9. Holzmann, Robert & Ayuso, Mercedes & Alaminos, Estefanía & Bravo, Jorge Miguel, 2019. "Life Cycle Saving and Dissaving Revisited across Three-Tiered Income Groups: Starting Hypotheses, Refinement through Literature Review, and Ideas for Empirical Testing," IZA Discussion Papers 12655, Institute of Labor Economics (IZA).

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