How Seniors Change Their Asset Holdings During Retirement

TitleHow Seniors Change Their Asset Holdings During Retirement
Publication TypeReport
Year of Publication2009
AuthorsSmith, KE, Soto, M, Penner, R
InstitutionCenter for Retirement Research Working Papers Center for Retirement Research at Boston College
KeywordsDemographics, Net Worth and Assets, Public Policy
Abstract

We use the 1998-2006 waves of the Health and Retirement Study (HRS) to investigate how households change their asset holdings at older ages. We find a notable increase in the net worth of older households between 1998 and 2006, with most of the growth due to housing. Our results indicate that, through 2006, older households did not spend all of their capital gains. This asset accumulation provides older households with a financial cushion for the turbulence experienced after 2007. The wealth distribution is highly skewed, and the age patterns of asset accumulation and decumulation vary considerably by income group. High-income seniors increase assets at older ages. Middle-income seniors reduce their assets in retirement, but at a rate that for most seniors will not deplete assets within their expected life. Many low-income seniors accumulate fewer assets and spend their financial assets at a rate that will mostly deplete them at older ages, leaving low-income seniors with only Social Security and DB pension income at older ages.

Notes

Center for Retirement Research Working Paper

URLhttp://www.nber.org/2009rrc/3.1 20Smith, 20Soto, 20Penner.pdf
Endnote Keywords

Net Worth/asset accumulation/socioeconomic Status/wealth distribution

Endnote ID

22080

Citation Key5755