|
|
NBER Working Paper No. 17536
Issued in October 2011
NBER Program(s): AG EFG PE
The NBER Bulletin on Aging and Health provides summaries of publications like this.
You can sign up to receive the NBER Bulletin on Aging and Health by email.
This paper presents evidence on the resources available to households as they enter retirement. It draws heavily on data collected by the Health and Retirement Study and calculates the "potential additional annuity income" that households could purchase, given their holdings of non-annuitized financial assets at the start of retirement. Even if households used all of their financial assets inside and outside personal retirement accounts to purchase a life annuity, only 47 percent of households between the ages of 65 and 69 in 2008 could increase their life-contingent income by more than $5,000 per year. At the upper end of the wealth distribution, however, a substantial number of households could make large annuity purchases. The paper also considers the role of housing equity in the portfolios of retirement-age households, and explores the extent to which households draw down housing equity and financial assets as they age. Many households appear to treat housing equity and non-annuitized financial assets as “precautionary savings,” tending to draw them down only when they experience a shock such as the death of a spouse or a period of substantial medical outlays. Because home equity is often conserved until very late in life, for many households it may provide some insurance against the risk of living longer than expected.
You may purchase this paper on-line in .pdf format
from SSRN.com ($5) for electronic delivery.
Acknowledgments and Disclosures
Machine-readable bibliographic record -
MARC,
RIS,
BibTeX
|
