Measuring Dissaving Out of Retirement Wealth

20 Pages Posted: 7 Mar 2007

See all articles by Paul A. Smith

Paul A. Smith

Board of Governors of the Federal Reserve System

David A. Love

Williams College - Department of Economics

Date Written: March 2007

Abstract

The approaching retirement of the baby boomers, accelerating trend from DB to DC pension plans, and growing uncertainty over the solvency of Social Security all raise important questions about the ability of households to finance their retirement years with liquid assets, rather than annuities. We use data from four waves of the HRS to investigate how households spend down their retirement wealth, and, in particular, whether they appear to run down their retirement accounts too quickly. We find no evidence of excessive dissaving over the period 1998 to 2004. Indeed, the annuitized value of total wealth rose for most households over this period, suggesting that households are not running down their assets too fast, given their remaining life expectancies.

Keywords: household wealth, saving, adequacy, retirement, pension, Social Security, poverty

JEL Classification: E21

Suggested Citation

Smith, Paul A. and Love, David A., Measuring Dissaving Out of Retirement Wealth (March 2007). Available at SSRN: https://ssrn.com/abstract=968431 or http://dx.doi.org/10.2139/ssrn.968431

Paul A. Smith (Contact Author)

Board of Governors of the Federal Reserve System ( email )

20th Street and Constitution Avenue NW
Washington, DC 20551
United States

David A. Love

Williams College - Department of Economics ( email )

South Academic Building, RM 202
Williamstown, MA 01267
United States

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
159
Abstract Views
1,091
rank
210,208
PlumX Metrics