Net Worth and Housing Equity in Retirement
This paper documents the trends in the life-cycle profiles of net worth and housing equity between 1983 and 2004. The net worth of older households significantly increased during the housing boom of recent years. However, net worth grew by more than housing equity, in part because other assets also appreciated at the same time. Moreover, the younger elderly offset rising house prices by increasing their housing debt, and used some of the proceeds to invest in other assets. We also consider how much of their housing equity older households can actually tap, using reverse mortgages. This fraction is lower at younger ages, such that young retirees can consume less than half of their housing equity. These results imply that 'consumable' net worth is smaller than standard calculations of net worth.
|Date of creation:||Dec 2007|
|Date of revision:|
|Publication status:||published as Recalibrating Retirement Spending and Saving John Ameriks and Olivia S. Mitchell Print publication date: 2008 Print ISBN-13: 9780199549108 Published to Oxford Scholarship Online: January 2009 DOI: 10.1093/acprof:oso/9780199549108.001.0001|
|Note:||AG AP EFG LS PE|
|Contact details of provider:|| Postal: |
Web page: http://www.nber.org
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Todd Sinai & Nicholas S. Souleles, 2005.
"Owner-Occupied Housing as a Hedge Against Rent Risk,"
The Quarterly Journal of Economics,
MIT Press, vol. 120(2), pages 763-789, May.
- Todd Sinai & Nicholas S. Souleles, 2003. "Owner-Occupied Housing as a Hedge Against Rent Risk," NBER Working Papers 9462, National Bureau of Economic Research, Inc.
- Todd Sinai & Nicholas S. Souleles, 2005. "Owner-occupied housing as a hedge against rent risk," Working Papers 05-10, Federal Reserve Bank of Philadelphia.
- David A. Wise, 2004. "Perspectives on the Economics of Aging," NBER Books, National Bureau of Economic Research, Inc, number wise04-1, May.
- David A. Wise, 2004. "Introduction to "Perspectives on the Economics of Aging"," NBER Chapters, in: Perspectives on the Economics of Aging, pages 1-16 National Bureau of Economic Research, Inc.
- Sally R. Merrill & Meryl Finkel & Nandinee K. Kutty, 1994. "Potential Beneficiaries from Reverse Mortgage Products for Elderly Homeowners: An Analysis of American Housing Survey Data," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 22(2), pages 257-299.
- B. Douglas Bernheim & Lorenzo Forni & Jagadeesh Gokhale & Laurence J. Kotlikoff, 2000.
"How much should Americans be saving for retirement?,"
0002, Federal Reserve Bank of Cleveland.
- B. Douglas Bernheim, 2000. "How Much Should Americans Be Saving for Retirement?," American Economic Review, American Economic Association, vol. 90(2), pages 288-292, May.
- Jonathan Skinner, 2007.
"Are You Sure You're Saving Enough for Retirement?,"
NBER Working Papers
12981, National Bureau of Economic Research, Inc.
- Steven F. Venti & David A. Wise, 1990.
"Aging and the Income Value of Housing Wealth,"
NBER Working Papers
3547, National Bureau of Economic Research, Inc.
When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:13693. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.