A Bumpy Road: Asset Accumulation, Unexpected Life Course Events, and Later Life Economic Security

This dissertation examines retirement security through an analysis of asset holdings among today's older adults, with a particular focus pre-retirees, who are near retirement. The research seeks to better understand households' retirement resources and later life economic vulnerabilities by: 1.) assessing existing assets among all older U.S. households (51+) and exploring the racial wealth gap among this group; 2.) measuring the direction and magnitude of impacts from several household level economic shocks on the wealth of older households; and 3.) investigating how households prepare for retirement and approach retirement saving. Several theoretical frameworks help to guide the study including the life-cycle hypothesis of saving established by economist Modigliani, life course scholarship by sociologists Elder, Rank, and Kemp, the assets framework expounded by Sherraden and Shapiro, and the institutional model of savings. The mixed-methods study integrates analysis from the Health and Retirement Study (HRS), providing a longitudinal look at the assets of older households 51+ for a decade from 1998 to 2008, and data from semi-structured qualitative interviews. Multivariate fixed effects regression on the panel data assesses the long-term impacts of household economic shocks on wealth. The data reveal largely inadequate savings overall and the racial wealth gap, which has been documented among the general U.S. population, remains large for older adults 51+. The analysis reveals significant negative declines in wealth due to common household events for older adults. Qualitative semi-structured interviews among 16 individuals close to or recently retired (ages 50-65) reveal barriers to saving for retirement such as limited financial knowledge about savings mechanisms, inadequate income sources, and unexpected financial events. The data also point to the important role of institutional structures in shaping retirement decisions. Given the challenges in saving for retirement at the household level, policy should seek to support programs which pool risk across groups, such as Social Security and pensions. Evidence from the study suggests that household-level strategies are likely to be limited in their effectiveness without adequate institutional mechanisms for fostering retirement resources.

Copyright - Copyright ProQuest, UMI Dissertations Publishing 2013 Last updated - 2014-01-22 First page - n/a

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