The Composition and Drawdown of Wealth in Retirement

TitleThe Composition and Drawdown of Wealth in Retirement
Publication TypeJournal Article
Year of Publication2011
AuthorsPoterba, JM, Venti, SF, Wise, DA
JournalThe Journal of Economic Perspectives
Volume25
Issue4
Pagination95
KeywordsIncome, Methodology, Net Worth and Assets, Other, Retirement Planning and Satisfaction
Abstract

This paper presents evidence on the resources available to households as they enter retirement. It draws heavily on data collected by the Health and Retirement Study. We calculate the potential additional annuity income that households could purchase, given their holdings of non-annuitized financial assets at the start of retirement. We also consider the role of housing equity in the portfolios of retirement-age households and explore the extent to which households draw down housing equity and financial assets as they age. Because home equity is often conserved until very late in life, for many households it may provide some insurance against the risk of living longer than expected. Finally, we consider how our findings bear on a number of policy issues, such as the role for annuity defaults in retirement saving plans. PUBLICATION ABSTRACT

Endnote Keywords

Studies/Economic theory/Retirement/Income/Annuities/Equity

Endnote ID

62656

Citation Key7619