IDEAS home Printed from https://ideas.repec.org/p/cpr/ceprdp/20743.html

Why Do Couples and Singles Save during Retirement? Household Heterogeneity and its Aggregate Implications

Author

Listed:
  • De Nardi, Mariacristina
  • French, Eric
  • Jones, John Bailey
  • McGee, Rory

Abstract

We estimate a model of savings for retired couples and singles who face longevity and medical expense risks, and in which couples can leave bequests both when the first and last spouse dies. We show that saving motives vary by marital status, permanent income, and age. We find that most households save more for medical expenses than for bequests, but that richer households and couples, who hold most of the wealth, save more for bequests. As a result, bequest motives are a key determinant of aggregate retirement wealth.

Suggested Citation

  • De Nardi, Mariacristina & French, Eric & Jones, John Bailey & McGee, Rory, 2025. "Why Do Couples and Singles Save during Retirement? Household Heterogeneity and its Aggregate Implications," CEPR Discussion Papers 20743, Centre for Economic Policy Research.
    • Handle: RePEc:cpr:ceprdp:20743
    as

    Download full text from publisher

    File URL: https://cepr.org/publications/DP20743
    Download Restriction: no
    ---><---

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. is not listed on IDEAS
    2. Kárpáti, D.;, 2022. "Household Finance and Life-Cycle Economic Decisions under the Shadow of Cancer," Health, Econometrics and Data Group (HEDG) Working Papers 22/16, HEDG, c/o Department of Economics, University of York.
    3. Advani, Arun & Summers, Andy, 2022. "Measuring and taxing top incomes and wealth," The Warwick Economics Research Paper Series (TWERPS) 1403, University of Warwick, Department of Economics.
    4. Philippe De Donder & Marie‐Louise Leroux, 2021. "Long term care insurance with state‐dependent preferences," Health Economics, John Wiley & Sons, Ltd., vol. 30(12), pages 3074-3086, December.
    5. Siha Lee & Kegon Teng Kok Tan, 2023. "Bequest Motives and the Social Security Notch," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 51, pages 888-914, December.
    6. Auclert, Adrien & Malmberg, Hannes & Martenet, Frederic & Rognlie, Matthew, 2021. "Demographics, Wealth, and Global Imbalances in the Twenty-First Century," CEPR Discussion Papers 16470, Centre for Economic Policy Research.
    7. Gobbi, Paula Eugenia & Baudin, Thomas & De Rock, Bram, 2021. "Economics and family structures," CEPR Discussion Papers 16516, Centre for Economic Policy Research.
    8. Neha Bairoliya & Areendam Chanda & Jingyi Fang & Fang Yang, 2025. "Household Consumption and Savings over the Life Cycle: The Roles of Demographics and Durables," Working Papers 2537, Federal Reserve Bank of Dallas, revised 15 Jun 2026.
    9. Taiyo Fukai & Hidehiko Ichimura & Sagiri Kitao & Minamo Mikoshiba, 2025. "Medical expenditures over the life-cycle: persistent risks and insurance," The Japanese Economic Review, Springer, vol. 76(2), pages 285-336, April.
    10. Pashchenko, Svetlana & Porapakkarm, Ponpoje, 2020. "Saving Motives over the Life-Cycle," MPRA Paper 100208, University Library of Munich, Germany.
    11. Aleksandra Kolasa, 2022. "The long-term impact of quasi-universal transfers to older households," Working Papers 2022-28, Faculty of Economic Sciences, University of Warsaw.
    12. Minamo MIKOSHIBA, 2025. "Universal Insurance with In-kind Transfers: The welfare effects of long-term care insurance in Japan," Discussion papers 25030, Research Institute of Economy, Trade and Industry (RIETI).
    13. Etgeton, Stefan & Fischer, Björn & Ye, Han, 2023. "The effect of increasing retirement age on households’ savings and consumption expenditure," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 221, pages 1-37.
    14. van der Vaart, J & Groneck, M & van Ooijen, R, 2024. "Health Inequalities and the Progressivity of Old-Age Social Insurance Programs," Health, Econometrics and Data Group (HEDG) Working Papers 24/20, HEDG, c/o Department of Economics, University of York.
    15. Borella, Margherita & De Nardi, Mariacristina & Yang, Fang & Torres Chain, Johanna, 2025. "Why Do Households Save and Work?," CEPR Discussion Papers 20323, Centre for Economic Policy Research.
    16. Giulio Fella & Martin B. Holm & Thomas Michael Pugh, 2024. "Saving after Retirement and Preferences for Residual Wealth," Staff Working Papers 24-21, Bank of Canada.
    17. Fahle, Sean, 2025. "What do bequests in married couples with a surviving spouse tell us about bequest motives?," Journal of Public Economics, Elsevier, vol. 244(C).
    18. Fonseca, Raquel & Moro-Egido, Ana I. & Morin, Hugo, 2024. "Stress and retirement," Economic Modelling, Elsevier, vol. 131(C).
    19. Horneff, Vanya & Love, David & Maurer, Raimond, 2026. "Rules of thumb and retirement accounts," Journal of Banking & Finance, Elsevier, vol. 183(C).
    20. Maurice Obstfeld, 2025. "Natural and Neutral Real Interest Rates: Past and Future," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 73(2), pages 339-392, June.

    More about this item

    Keywords

    ;

    JEL classification:

    • D1 - Microeconomics - - Household Behavior
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D15 - Microeconomics - - Household Behavior - - - Intertemporal Household Choice; Life Cycle Models and Saving
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cpr:ceprdp:20743. See general information about how to correct material in RePEc.

    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.

    We have no bibliographic references for this item. You can help adding them by using 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: CEPR (email available below). General contact details of provider: https://cepr.org/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.