Projected Retirement Wealth and Saving Adequacy in the Health and Retirement Study

TitleProjected Retirement Wealth and Saving Adequacy in the Health and Retirement Study
Publication TypeBook Chapter
Year of Publication2000
AuthorsMoore, J, Mitchell, OS
EditorMitchell, OS, Hammond, B, Rappaport, A
Book TitleForecasting Retirement Needs and Retirement Wealth
Pagination68-94
PublisherUniv. of Pennsylvania Press
CityPhiladelphia
KeywordsConsumption and Savings, Net Worth and Assets
Abstract

In the future it is likely that retirees will have to take on more of the burden of ensuring their own well-being then is now the case. This is because of the growing population over the age of 65 that is causing the social security surplus to wither away and the ongoing trend toward defined contribution retirement plans rather then defined benefit plans. However, household savings rates have plunged over the last half-century and this causes one to wonder how people will maintain their current consumption levels when retired. The authors use the first wave (1992) of the Health and Retirement Study in order to illustrate a life cycle model of savings. These researchers also look at initial and projected wealth, savings needs, replacement rates, and income. They find that the median current wealth of older households is 325,000, including retirement plans and assets, and they feel that at retirement the median wealth will be 380,000. At the same time though the median older household will need a savings rate of 16 in order to maintain current consumption levels in retirement.

Notes

RDA 1996-002; Revision of NBER Working Paper No. 6240 ProCite field 8 : eds.

Endnote Keywords

Wealth/Saving/Retirement Wealth

Endnote ID

8150

Endnote Author Address

HRS: 1992

Short TitleProjected Retirement Wealth and Saving Adequacy in the Health and Retirement Study
Citation Key5148