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Baby Boomer Retirement Security: The Roles of Planning, Financial Literacy, and Housing Wealth

  • Annamaria Lusardi

    ()

    (Dartmouth College)

  • Olivia S. Mitchell

    ()

    (Wharton School, University of Pennsylvania)

We compare wealth holdings across two cohorts of the Health and Retirement Study: the early Baby Boomers in 2004, and individuals in the same age group in 1992. Levels and patterns of total net worth have changed relatively little over time, though Boomers rely more on housing equity than their predecessors. Most important, planners in both cohorts arrive close to retirement with much higher wealth levels and display higher financial literacy than non-planners. Instrumental variables estimates show that planning behavior can explain the differences in savings and why some people arrive close to retirement with very little or no wealth.

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Paper provided by Center for Research on Pensions and Welfare Policies, Turin (Italy) in its series CeRP Working Papers with number 54.

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Length: 42 pages
Date of creation: Nov 2006
Date of revision:
Handle: RePEc:crp:wpaper:54
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  12. Hurst, Erik & Kennickell, Arthur & Lusardi, Annamaria & Torralba, Francisco, 2006. "Precautionary savings and the importance of business owners," CFS Working Paper Series 2006/16, Center for Financial Studies (CFS).
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  18. Annamaria Lusardi & Jason Beeler, 2006. "Savings Between Cohorts: The Role of Planning," Working Papers wp122, University of Michigan, Michigan Retirement Research Center.
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  31. Olivia S. Mitchell & James Moore & John Phillips, . "Explaining Retirement Saving Shortfalls," Pension Research Council Working Papers 98-13, Wharton School Pension Research Council, University of Pennsylvania.
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