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Individuals' Uncertainty about Future Social Security Benefits and Portfolio Choice

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  • Adeline Delavande
  • Susann Rohwedder

Abstract

Little is known about the degree to which individuals are uncertain about their future Social Security benefits, how this varies within the U.S. population, and whether this uncertainty influences financial decisions related to retirement planning. To illuminate these issues, the authors present empirical evidence from the Health and Retirement Study Internet Survey and document systematic variation in respondents' uncertainty about their future Social Security benefits by individual characteristics. They find that respondents with higher levels of uncertainty about future benefits hold a smaller share of their wealth in stocks.

Suggested Citation

  • Adeline Delavande & Susann Rohwedder, 2010. "Individuals' Uncertainty about Future Social Security Benefits and Portfolio Choice," Working Papers WR-782, RAND Corporation.
    • Handle: RePEc:ran:wpaper:wr-782
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    References listed on IDEAS

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    More about this item

    Keywords

    expectations; portfolio choice; subjective probabilities; uncertatinty; Health and Retirement Study;
    All these keywords.

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles

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