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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.

Suggested Citation

  • 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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    Cited by:

    1. Alice Henriques Volz & Lindsay Jacobs & Elizabeth Llanes & Kevin B. Moore & Jeffrey P. Thompson, 2021. "Wealth Concentration in the United States Using an Expanded Measure of Net Worth," Working Papers 21-6, Federal Reserve Bank of Boston.
    2. Simone Arrigoni & Laura Boyd & Tara McIndoe-Calder, 2025. "The long and the short of it: inheritance and wealth in Ireland," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 23(1), pages 119-142, March.
    3. John Edward Sabelhaus & Jeffrey P. Thompson, 2021. "Racial Wealth Disparities: Reconsidering the Roles of Human Capital and Inheritance," Working Papers 22-3, Federal Reserve Bank of Boston.
    4. Alice Henriques Volz & Jeffrey P. Thompson, 2021. "A New Look at Racial Disparities Using a More Comprehensive Wealth Measure," Current Policy Perspectives 92970, Federal Reserve Bank of Boston.
    5. Jonathan D. Fisher & David S. Johnson & Timothy M. Smeeding & Jeffrey P. Thompson, 2022. "Inequality in 3‐D: Income, Consumption, and Wealth," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 68(1), pages 16-42, March.
    6. Lisa J. Dettling & Sarena Goodman & Sarah Reber, 2022. "Saving and Wealth Accumulation among Student Loan Borrowers: Implications for Retirement Preparedness," Finance and Economics Discussion Series 2022-019, Board of Governors of the Federal Reserve System (U.S.).

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    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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