Individuals’ Uncertainty about Future Social Security Benefits and Portfolio Choice
The RAND Corporation
New University of Lisbon - Faculdade de Economia
August 1, 2010
Netspar Discussion Paper No. 08/2010-047
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, we 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. We find that respondents with higher levels of uncertainty about future benefits hold a smaller share of their wealth in stocks.
Number of Pages in PDF File: 42
Keywords: expectations, portfolio choice, subjective probabilities, uncertainty, Health and Retirement Study
JEL Classification: G11, D14, D81, D01working papers series
Date posted: November 14, 2010
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