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Wealth Distribution and Retirement Preparation Among Early Savers

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Abstract

This paper develops a new combined wealth measure using data from the Survey of Consumer Finances, by augmenting data on net worth with estimates of defined benefit (DB) pension wealth and expected Social Security wealth. We use this combined wealth concept to explore retirement preparation among groups of households in their pre-retirement years (40-49 and 50-59) and also to explore the concentration of wealth. We find evidence of moderate, but rising, shortfalls in retirement preparation. We also show that including DB pension and Social Security wealth results in markedly lower measures of wealth concentration. Trends toward higher concentration over time are also somewhat moderated.

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  • Alice Henriques Volz & Lindsay Jacobs & Elizabeth Llanes & Kevin B. Moore & Jeffrey P. Thompson, 2020. "Wealth Distribution and Retirement Preparation Among Early Savers," Finance and Economics Discussion Series 2020-043, Board of Governors of the Federal Reserve System (U.S.).
    • Handle: RePEc:fip:fedgfe:2020-43
    DOI: 10.17016/FEDS.2020.043
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    1. Emmanuel Saez & Gabriel Zucman, 2016. "Editor's Choice Wealth Inequality in the United States since 1913: Evidence from Capitalized Income Tax Data," The Quarterly Journal of Economics, Oxford University Press, vol. 131(2), pages 519-578.
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    5. Wolff, Edward N., 2007. "The retirement wealth of the baby boom generation," Journal of Monetary Economics, Elsevier, vol. 54(1), pages 1-40, January.
    6. Pfeffer, Fabian T. & Schoeni, Robert F. & Kennickell, Arthur & Andreski, Patricia, 2016. "Measuring wealth and wealth inequality: Comparing two U.S. surveys," Journal of Economic and Social Measurement, IOS Press, issue 2, pages 103-120.
    7. Alicia H. Munnell & Matthew S. Rutledge & Anthony Webb, 2014. "Are Retirees Falling Short? Reconciling the Conflicting Evidence," Working Papers, Center for Retirement Research at Boston College wp2014-16, Center for Retirement Research.
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    More about this item

    Keywords

    Inequality; Pensions; Retirement; Wealth; Social security;

    JEL classification:

    • D30 - Microeconomics - - Distribution - - - General
    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
    • J10 - Labor and Demographic Economics - - Demographic Economics - - - General

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