Savings, Portfolio Choice, and Retirement Expectations

TitleSavings, Portfolio Choice, and Retirement Expectations
Publication TypeReport
Year of Publication2006
AuthorsvanSoest, AHO, Arie, K
InstitutionThe University of Michigan, Michigan Retirement Research Center
Call Numberwp_2006/MRRCwp119.pdf
KeywordsConsumption and Savings, Expectations, Net Worth and Assets

Studying household investment behavior is essential for understanding the full consequences of old age social security benefits. Using data from six waves of the Health and Retirement Study, we analyze the dynamics of portfolio composition before respondents start claiming social security benefits. We consider ownership as well as amounts held of several types of assets and debts. Using panel data censored regression models, portfolio adjustment is explained on the basis of demographics like gender, race, and year of birth, education level, household income, and perceived social security entitlements. We find that expectations of old age social security benefits have little effect on portfolio decisions, although there is some evidence that higher expected social security benefits lead to more risky financial investments, particularly in IRAs.

Endnote Keywords

Savings/Portfolio Choice/Retirement Expectations

Endnote ID


Citation Key5660