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Portfolio Composition and Financial Security in Retirement

Author

Listed:
  • Nicole Black

    (Centre for Health Economics, Monash Business School, Monash University)

  • Anthony Harris

    (Centre for Health Economics, Monash Business School, Monash University)

  • David W. Johnston

    (Centre for Health Economics, Monash Business School, Monash University)

  • Trong-Anh Trinh

    (Centre for Health Economics, Monash Business School, Monash University)

Abstract

This paper examines how the composition of financial resources relates to financial hardship and financial satisfaction among retired households. Using 23 waves of a nationally representative Australian panel, we distinguish between government pensions, private income, liquid financial assets, housing wealth, and debt. In fixed-effects models that exploit within-individual changes over time, liquid financial assets are strongly associated with lower financial hardship and higher financial satisfaction, while other forms of wealth show little independent association. We additionally examine responses to health shocks and find that liquid assets significantly attenuate their adverse financial effects, providing direct evidence of a buffering role. These results indicate that retirees with similar total wealth may experience different financial outcomes depending on portfolio composition, and suggest that adequacy assessments based on aggregate wealth or income replacement rates alone may overlook an important source of financial vulnerability.

Suggested Citation

  • Nicole Black & Anthony Harris & David W. Johnston & Trong-Anh Trinh, 2026. "Portfolio Composition and Financial Security in Retirement," Papers 2026-01, Centre for Health Economics, Monash University.
    • Handle: RePEc:mhe:chemon:2026-01
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    Keywords

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    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination

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