Individuals’ Uncertainty about Future Social Security Benefits and Portfolio Choice
42 Pages Posted: 22 Sep 2010
Date Written: September 21, 2010
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.
Keywords: expectations, portfolio choice, subjective probabilities, uncertainty, Health and Retirement Study
JEL Classification: G11, D14, D81, D01
Suggested Citation: Suggested Citation