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

Lusardi, Annamaria; Mitchell, Olivia S.

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

NBER Working Paper No. w12585

40 Pages Posted: 17 Oct 2006 Last revised: 21 Nov 2022

See all articles by Annamaria Lusardi

Annamaria Lusardi

Stanford University - Stanford Institute for Economic Policy Research

Olivia S. Mitchell

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

There are 3 versions of this paper

Date Written: October 2006

Abstract

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

Suggested Citation: Suggested Citation

Lusardi, Annamaria and Mitchell, Olivia S., Baby Boomer Retirement Security: The Roles of Planning, Financial Literacy, and Housing Wealth (October 2006). NBER Working Paper No. w12585, Available at SSRN: https://ssrn.com/abstract=936586