Comparing Retirement Wealth Trajectories on Both Sides of the Pond

28 Pages Posted: 18 Apr 2016

See all articles by Richard W. Blundell

Richard W. Blundell

UCL; IFS; IZA Institute of Labor Economics; Centre for Economic Policy Research (CEPR)

Rowena Crawford

Institute for Fiscal Studies (IFS)

Eric French

Department of Economics; Institute for Fiscal Studies (IFS)

Gemma Tetlow

Institute for Fiscal Studies (IFS)

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Date Written: April 2016

Abstract

We use comparable data from the US and England to examine similarities and differences in the level and trajectories of assets among households aged 70 and over. We find that in the US assets on average decline gradually with age, while in England older households actually accumulate wealth. These differences appear to be driven largely, though not entirely, by housing wealth: over the period we consider house price growth drove increases in housing wealth in England that more than offset the slow draw down of non-housing wealth. This suggests the illiquid nature of housing is likely to be an important factor in explaining wealth drawdown at older ages. We also consider the potential importance of bequest motives and savings to insure against the risk of medical and long-term care expenses.

Keywords: Savings

Suggested Citation

Blundell, Richard W. and Crawford, Rowena and French, Eric and Tetlow, Gemma, Comparing Retirement Wealth Trajectories on Both Sides of the Pond (April 2016). CEPR Discussion Paper No. DP11219, Available at SSRN: https://ssrn.com/abstract=2766547

Richard W. Blundell (Contact Author)

UCL ( email )

Department of Economics
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London, WC1E 6BT
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HOME PAGE: http://www.ucl.ac.uk/~uctp39a/

IFS

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HOME PAGE: http://www.ifs.org.uk

IZA Institute of Labor Economics

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Centre for Economic Policy Research (CEPR)

London
United Kingdom

Rowena Crawford

Institute for Fiscal Studies (IFS) ( email )

7 Ridgmount Street
London, WC1E 7AE
United Kingdom

Eric French

Department of Economics ( email )

Gower Street
London, WC1E 6BT
United Kingdom

Institute for Fiscal Studies (IFS) ( email )

7 Ridgmount Street
London, WC1E 7AE
United Kingdom

Gemma Tetlow

Institute for Fiscal Studies (IFS) ( email )

7 Ridgmount Street
London, WC1E 7AE
United Kingdom

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