How Seniors Change Their Asset Holdings During Retirement
We use the 1998-2006 waves of the Health and Retirement Study (HRS) to investigate how households change their asset holdings at older ages. We find a notable increase in the net worth of older households between 1998 and 2006, with most of the growth due to housing. Our results indicate that, through 2006, older households did not spend all of their capital gains. This asset accumulation provides older households with a financial cushion for the turbulence experienced after 2007. The wealth distribution is highly skewed, and the age patterns of asset accumulation and decumulation vary considerably by income group. High-income seniors increase assets at older ages. Middle-income seniors reduce their assets in retirement, but at a rate that for most seniors will not deplete assets within their expected life. Many low-income seniors accumulate fewer assets and spend their financial assets at a rate that will mostly deplete them at older ages, leaving low-income seniors with only Social Security and DB pension income at older ages.
|Date of creation:||Dec 2009|
|Date of revision:||Dec 2009|
|Contact details of provider:|| Postal: Hovey House, 140 Commonwealth Avenue, Chestnut Hill, MA 02467|
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Web page: http://crr.bc.edu/
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- Barbara A. Butrica & Howard M. Iams & Karen E. Smith & Eric J. Toder, 2009. "The Disappearing Defined Benefit Pension and its Potential Impact on the Retirement Incomes of Boomers," Working Papers, Center for Retirement Research at Boston College wp2009-2, Center for Retirement Research.
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"The Trajectory of Wealth in Retirement,"
Department of Economics Working Papers
2008-10, Department of Economics, Williams College.
- David A. Love & Michael G. Palumbo & Paul A. Smith, 2008. "The Trajectory of Wealth in Retirement," Working Papers, Center for Retirement Research at Boston College wp2008-7, Center for Retirement Research, revised Feb 2008.
- David A. Love & Michael G. Palumbo & Paul A. Smith, 2008. "The trajectory of wealth in retirement," Finance and Economics Discussion Series 2008-13, Board of Governors of the Federal Reserve System (U.S.).
- 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;International Institute of Public Finance, vol. 14(4), pages 481-502, August.
- Michael D. Hurd & Susann Rohwedder, 2008. "The Adequacy of Economic Resources in Retirement," Working Papers wp184, University of Michigan, Michigan Retirement Research Center.
- Alicia H. Munnell, 2003. "The Declining Role Of Social Security," Just the Facts jtf-6, Center for Retirement Research.
- Katharine Anderson & Eric French & Tina Lam, 2004. "You can't take it with you: asset run-down at the end of the life cycle," Economic Perspectives, Federal Reserve Bank of Chicago, issue Q III, pages 40-54.
- repec:crr:crrwps:2003-21 is not listed on IDEAS
- Richard W. Johnson & Gordon B.T. Mermin & Cori E. Uccello, 2006. "When The Nest Egg Cracks: Financial Consequences Of Health Problems, Marital Status Changes, And Job Layoffs At Older Ages," Working Papers, Center for Retirement Research at Boston College wp2005-18, Center for Retirement Research.
- 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.
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