Saving Preferences After Retirement

70 Pages Posted: 13 Jun 2018 Last revised: 12 Dec 2018

See all articles by Jennifer Alonso-García

Jennifer Alonso-García

Department of Economics, Econometrics and Finance; Université Libre de Bruxelles (ULB) - Department of Mathematics; ARC Centre of Excellence in Population Ageing Research

Hazel Bateman

UNSW Sydney, CEPAR

Johan Bonekamp

Tilburg University - Department of Econometrics & Operations Research

Arthur van Soest

Tilburg University

Ralph Stevens

CPB Netherlands Bureau of Economic Policy Analysis; CEPAR

Date Written: December 11, 2018

Abstract

We investigate the importance of alternative motives for choosing a saving and consumption trajectory after retirement. Using an online experimental survey, we elicit the impact on advised spending patterns and underlying saving motives of alternative retirement drawdown designs, comprising different combinations of annuity income and wealth, and of major life events such as becoming frail or losing a spouse. We find that individuals' saving motives are revised in anticipation of major life events. They are less responsive to variation in "experimental" retirement drawdown arrangements, remaining aligned to prevailing institutional arrangements. Our results suggest that the main explanations for the widespread behaviour of retirees to hold onto their wealth are the desire to hold precautionary savings for health and other unforeseen expenses, facilitating an intra-household bequest, and making it possible to enjoy life now as well as later.

Keywords: consumption smoothing, asset decumulation, saving motives, pension design

JEL Classification: J14, J26, D14, D31

Suggested Citation

Alonso-García, Jennifer and Bateman, Hazel and Bonekamp, Johannes and van Soest, Arthur and Stevens, Ralph, Saving Preferences After Retirement (December 11, 2018). Available at SSRN: https://ssrn.com/abstract=3184043 or http://dx.doi.org/10.2139/ssrn.3184043

Jennifer Alonso-García (Contact Author)

Department of Economics, Econometrics and Finance ( email )

Postbus 72
9700 AB Groningen
Netherlands

Université Libre de Bruxelles (ULB) - Department of Mathematics ( email )

Brussels
Belgium

ARC Centre of Excellence in Population Ageing Research ( email )

Level 6, Central Lobby (enter via East Lobby)
Australian School of Business Building
Sydney, New South Wales NSW 2052
Australia

Hazel Bateman

UNSW Sydney, CEPAR ( email )

High Street
Sydney, NSW 2052
Australia

Johannes Bonekamp

Tilburg University - Department of Econometrics & Operations Research ( email )

Tilburg, 5000 LE
Netherlands

Arthur Van Soest

Tilburg University ( email )

P.O. Box 90153
Tilburg, DC 5000 LE
Netherlands

Ralph Stevens

CPB Netherlands Bureau of Economic Policy Analysis ( email )

P.O. Box 80510
2508 GM The Hague, 2585 JR
Netherlands

HOME PAGE: http://https://www.cpb.nl/medewerkers/ralph-stevens

CEPAR ( email )

Sydney, NSW 2052
Australia
+61 2 9385 1883 (Fax)

Register to save articles to
your library

Register

Paper statistics

Downloads
94
Abstract Views
449
rank
282,538
PlumX Metrics