Baby Boomer Retirement Security: The Roles of Planning, Financial Literacy, and Housing Wealth

Posted: 1 Oct 2006

See all articles by Annamaria Lusardi

Annamaria Lusardi

George Washington University - Department of Accountancy; National Bureau of Economic Research (NBER)

Olivia S. Mitchell

University of Pennsylvania - The Wharton School; University of Pennsylvania - The Wharton School, Pension Research Council; National Bureau of Economic Research (NBER)

Multiple version iconThere are 3 versions of this paper

Date Written: September 2006

Abstract

This paper compares wealth holdings across two cohorts of the Health and Retirement Study: the early Baby Boomers surveyed in 2004, and individuals in the same age group in 1992. We find that levels and patterns of total net worth have changed relatively little over time, though Boomers will rely more on housing equity than their predecessors. Most importantly, planners in both cohorts approached retirement with much higher wealth levels and display higher financial literacy than non-planners. Instrumental variable estimates show that planning behavior can explain the differences in savings and why some people near retirement with very little or no wealth.

Keywords: Wealth Holdings, Housing Wealth, Lack of Planning, Literacy, Cohorts

JEL Classification: D91, E21

Suggested Citation

Lusardi, Annamaria and Mitchell, Olivia S., Baby Boomer Retirement Security: The Roles of Planning, Financial Literacy, and Housing Wealth (September 2006). CFS Working Paper No. 2006/20, Pension Research Council WP2007-2, Available at SSRN: https://ssrn.com/abstract=933601 or http://dx.doi.org/10.2139/ssrn.933601

Annamaria Lusardi (Contact Author)

George Washington University - Department of Accountancy ( email )

George Washington University School of Business
Washington, DC 20052
United States

HOME PAGE: http://business.gwu.edu/profiles/annamaria-lusardi/

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
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Olivia S. Mitchell

University of Pennsylvania - The Wharton School ( email )

Philadelphia, PA 19104-6365
United States

University of Pennsylvania - The Wharton School, Pension Research Council ( email )

3302 Steinberg Hall-Dietrich Hall
3620 Locust Walk
Philadelphia, PA 19104-6302
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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