@article {12893, title = {Boomerang Children and Parental Retirement Outcomes}, number = {30863}, year = {2023}, institution = {NBER}, abstract = {As the share of U.S. adult children living with their parents increases, it is important to understand how children who {\textquotedblleft}boomerang{\textquotedblright} back home impact their parents in their pre-retirement and post-retirement years. We use data from the Health and Retirement Study (HRS) to examine the effects of boomerang children on their parents{\textquoteright} labor market expectations and choices, as well as on their wealth, health, and life satisfaction. Event study analysis suggests that boomerang children return home due to short-term instabilities, such as negative shocks to marriage, income, and employment. We find that boomerang children are associated with a small increase in their parents{\textquoteright} subjective probability of working after age 65. However, there is no clear statistically significant evidence that they impact parents{\textquoteright} current or future labor market choices; nor is there any evidence that they affect parents{\textquoteright} wealth, health, or life satisfaction.}, keywords = {Adult children, labor market expectations, Retirement}, doi = {10.3386/w30863}, author = {Seiter, Grant M. and Lopez, Mary J and Sita Nataraj Slavov} } @article {12954, title = {Do Older Adults Accurately Forecast Their Social Security Benefits?}, number = {31023}, year = {2023}, institution = {NBER}, abstract = {How accurate are older people{\textquoteright}s expectations about their future Social Security benefits? Using panel data from the Health and Retirement Study, we compare respondents{\textquoteright} observed Social Security claiming ages and benefits with subjective expectations provided during their 50s and early 60s. We find that, while older adults generally have accurate expectations about their claiming age, they underestimate their annual Social Security income by approximately $1,896 (11.5 percent) on average. However, both accuracy and precision increase with age, and the forecast error for people in their early 60s is not statistically different from zero. Exploiting plausibly exogenous variation in the mailing of Social Security statements, which contain personalized information about future benefits, we show that information provision reduces the forecast error in annual income by $344 (2.1 percent of the average benefit). }, keywords = {Expectations, Retirement Planning, Social Security Benefits}, doi = {10.3386/w31023}, author = {Seiter, Grant M. and Sita Nataraj Slavov} } @article {doi:10.1080/13504851.2021.1975026, title = {Grey Divorce and labour Supply}, journal = {Applied Economics Letters}, volume = {1}, year = {2023}, pages = {66-79}, abstract = {We use data from the Health and Retirement Study (HRS) to examine how labour supply changes around divorces that occur later in life. We find that the probability of work and hours worked increase for women, but decline for men, with evidence of an anticipation effect for men. We find weak evidence of a post-divorce decline in per-capita wealth and stronger evidence of a decline in per-capita non-own-wage income for women, but not for men. While not causal, these findings are consistent with income and possibly wealth effects driving the post-divorce increase in women{\textquoteright}s labour supply.}, keywords = {Divorce, gender, Labor Supply}, doi = {10.1080/13504851.2021.1975026}, author = {Sita Nataraj Slavov and Chao Wei} } @article {ramnath_shoven_slavov_2020, title = {Pathways to retirement through self-employment}, journal = {Journal of Pension Economics and Finance}, year = {2020}, type = {Journal}, abstract = {We examine the role of self-employment in retirement transitions using a panel of administrative tax data. We find that the hazard of self-employment increases at popular retirement ages associated with Social Security eligibility, particularly for those with greater retirement wealth. Late-career transitions to self-employment are associated with a larger drop in income than similar mid-career transitions. Data from the Health and Retirement Study suggest that hours worked also fall upon switching to self-employment. These results suggest that self-employment at older ages may serve as a {\textquoteleft}bridge job,{\textquoteright} allowing workers to gradually reduce hours and earnings along the pathway to retirement. }, keywords = {Retirement, Self-employment, Social Security}, doi = {10.1017/S1474747220000062}, author = {Ramnath, Shanthi and John B. Shoven and Sita Nataraj Slavov} } @article {10203, title = {Do Immigrants Delay Retirement and Social Security Claiming?}, journal = {National Bureau of Economic Research Working Paper Series}, volume = {No. 25518}, year = {2019}, note = {Author contact info:Mary LopezOccidental CollegeE-Mail: mlopez@oxy.eduSita SlavovSchar School of Policy and GovernmentGeorge Mason University3351 Fairfax Drive, MS 3B1Arlington, VA 22201Tel: 703/993-3171E-Mail: sslavov@gmu.edu}, month = {2019}, abstract = {As the share of older immigrants residing in the U.S. begins to rise, it is important to understand how immigrants{\textquoteright} retirement behavior and security compare to that of natives. This question has implications for the impact of immigration on government finances and for the retirement security of immigrants. We use data from the Health and Retirement Study (HRS) to examine how immigrants{\textquoteright} retirement and Social Security claiming patterns compare to those of natives. We find that immigrants are significantly less likely than natives to retire or claim Social Security in their early 60s. We do not find heterogeneous effects by ethnicity or age of arrival to the U.S. We also find no evidence that immigrants exit the survey at higher rates than U.S. natives in their late 50s through 60s, a finding that is consistent with immigrants retiring in the U.S. rather than abroad.}, keywords = {Immigrants, Immigration, Social Security}, doi = {10.3386/w25518}, url = {http://www.nber.org/papers/w25518}, author = {Lopez, Mary J and Sita Nataraj Slavov} } @article {9805, title = {Does retirement improve health and life satisfaction?}, journal = {Health Economics}, volume = {27}, year = {2018}, pages = {2067-2086}, abstract = {We utilize panel data from the Health and Retirement Study to investigate the impact of retirement on physical and mental health, life satisfaction, and health care utilization. Because poor health can induce retirement, we instrument for retirement using eligibility for Social Security and employer-sponsored pensions and coverage by the Social Security earnings test. We find strong evidence that retirement improves reported health, mental health, and life satisfaction. In addition, we find evidence of improvements in functional limitations in the long run. Although the impact on life satisfaction occurs within the first 4~years of retirement, many of the improvements in health show up four or more years later, consistent with the view that health is a stock that evolves slowly. We find no evidence that the health improvements are driven by increased health care utilization. In fact, results suggest decreased utilization in some categories.}, keywords = {Life Satisfaction, Optimism, Retirement Planning and Satisfaction}, issn = {1099-1050}, doi = {10.1002/hec.3821}, author = {Gorry, Aspen and Gorry, Devon and Sita Nataraj Slavov} } @article {9070, title = {The financial feasibility of delaying Social Security: evidence from administrative tax data}, journal = {Journal of Pension Economics and Finance}, volume = {17}, year = {2018}, month = {Jul-04-2018}, pages = {419-436}, abstract = {Despite the large and growing returns to deferring Social Security benefits, most individuals claim Social Security before the full retirement age. In this paper, we use a panel of administrative tax data on individuals likely to financially benefit from delaying Social Security claiming to explore the relationship between Social Security claiming and distributions from tax-advantaged retirement savings accounts. We find that the majority of our sample claim Social Security prior to taking distributions from Individual Retirement Accounts (IRAs). We also find that a third of our sample have IRA balances equivalent to at least two additional years of Social Security benefits, and a quarter have IRA balances equivalent to at least 4 years of Social Security benefits. We complement our analysis with data from the Health and Retirement Study and find that these percentages are considerably higher when other financial assets are taken into account. Copyright {\textcopyright} Cambridge University Press 2017 This is a work of the U.S. Government and is not subject to copyright protection in the United States.}, keywords = {Retirement Planning and Satisfaction, Social Security, Social Security linkage}, issn = {1474-7472}, doi = {10.1017/S147474721700004X}, url = {https://www.cambridge.org/core/product/identifier/S147474721700004X/type/journal_articlehttps://www.cambridge.org/core/services/aop-cambridge-core/content/view/S147474721700004X}, author = {Gopi Shah Goda and Ramnath, Shanthi and John B. Shoven and Sita Nataraj Slavov} } @article {9503, title = {The Power of Working Longer}, number = {WP 24226}, year = {2018}, month = {01/2018}, institution = {National Bureau of Economic Research}, address = {Cambridge, MA}, abstract = {This paper compares the relative strengths of working longer vs. saving more in terms of increasing a household{\textquoteright}s affordable, sustainable standard of living in retirement. Both stylized households and actual households from the Health and Retirement Study are examined. We assume that workers commence Social Security benefits when they retire. The basic result is that delaying retirement by 3-6 months has the same impact on the retirement standard of living as saving an additional one-percentage point of labor earnings for 30 years. The relative power of saving more is even lower if the decision to increase saving is made later in the work life. For instance, increasing retirement saving by one percentage point ten years before retirement has the same impact on the sustainable retirement standard of living as working a single month longer. The calculations of the relative power of working longer and saving more are done for a wide range of realized rates of returns on saving, for households with different income levels, and for singles as well as married couples. The results are quite invariant to these circumstances.}, keywords = {Couples, Decision making, Employment and Labor Force, Retirement and Labor Force, Savings}, issn = {08982937}, doi = {10.3386/w24226}, url = {http://www.nber.org/papers/w24226.pdf}, author = {Bronshtein, Gila and Jason S Scott and John B. Shoven and Sita Nataraj Slavov} } @article {9209, title = {Pathways to retirement through self-employment}, number = {Working Paper No. 23551}, year = {2017}, institution = {National Bureau of Economic Research}, address = {Cambridge, MA}, keywords = {Bridge employment, Retirement Planning and Satisfaction, Self-employment}, doi = {10.3386/w23551}, url = {http://www.nber.org/papers/w23551.pdf}, author = {Ramnath, Shanthi and John B. Shoven and Sita Nataraj Slavov} } @article {8836, title = {Leaving Big Money on the Table: Arbitrage Opportunities in Delaying Social Security}, number = {Working Paper No. 22853}, year = {2016}, month = {11/2016}, pages = {1-34}, institution = {National Bureau of Economic Research}, address = {Cambridge, MA}, abstract = {Recent research has documented that delaying the commencement of Social Security benefits increases the expected present value of retirement income for most people. Despite this research, the vast majority of individuals claim Social Security at or before full retirement age. Claiming Social Security early is not necessarily a mistake, as delaying Social Security commencement requires forgoing current income in exchange for future income. The decision to claim early could therefore rationally be driven by liquidity constraints, mortality concerns, bequest motives, a high time discount rate, or a variety of other preference related factors. However, for some individuals, delaying Social Security offers a significant arbitrage opportunity because they can defer Social Security and have higher income in all future years. Arbitrage exists for most primary earners who either purchase a retail-priced annuity or opt for a defined benefit annuity when a lump sum payout is offered, while forgoing the opportunity to defer Social Security. These individuals are essentially buying an expensive annuity when a cheaper one is available, and their decision to claim Social Security early is almost certainly a mistake. The magnitude of the mistake can reach up to approximately $250,000.}, keywords = {Older Adults, Retirement Planning and Satisfaction, Social Security}, doi = {10.3386/w22853}, url = {http://www.nber.org/papers/w22853.pdf}, author = {Bronshtein, Gila and Jason S Scott and John B. Shoven and Sita Nataraj Slavov} } @article {5856, title = {Does Retirement Improve Health and Life Satisfaction?}, year = {2015}, abstract = {We utilize panel data from the Health and Retirement Study to investigate the impact of retirement on physical and mental health, life satisfaction, and health care utilization. Because poor health can induce retirement, we instrument for retirement using eligibility for Social Security and employer sponsored pensions and coverage by the Social Security earnings test. We find strong evidence that retirement improves both health and life satisfaction. While the impact on life satisfaction occurs within the first 4 years of retirement, many of the improvements in health show up 4 or more years later, consistent with the view that health is a stock that evolves slowly. We find little evidence that retirement influences health care utilization.}, keywords = {Health Conditions and Status, Pensions, Public Policy, Retirement Planning and Satisfaction, Social Security}, url = {http://www.nber.org/papers/w21326.pdf}, author = {Gorry, Aspen and Gorry, Devon and Sita Nataraj Slavov} } @article {5976, title = {Recent Changes in the Gains from Delaying Social Security}, year = {2013}, institution = {Cambridge, MA, National Bureau of Economic Research}, abstract = {Social Security retirement benefits can be claimed at any age between 62 and 70, with delayed claiming resulting in larger monthly payments. In Shoven and Slavov (2013), we show that claiming later increases the present value of lifetime benefits for most individuals. However, this has not always been the case. During the late 1990s and early 2000s, a number of policy changes increased the gains from delay, particularly for couples. In addition, mortality improved and real interest rates fell substantially over this period, further increasing the attractiveness of delay. We perform simulations to examine the role of these factors in changing the gains from delay. We find that the gains from delay increased substantially after 2000, with changes in the interest rate playing the largest role in driving the increase. Using data from the Health and Retirement study, we show that individuals who turned 62 after 2000 are indeed more likely to delay than those who turned 62 before 2000. However, even in the younger cohort, most individuals still claim benefits soon after turning 62. Moreover, we find no evidence of a relationship between the probability of delay and the individual characteristics (e.g., gender, race, or health status) that affect the gains from delay.}, keywords = {Retirement Planning and Satisfaction, Social Security}, author = {John B. Shoven and Sita Nataraj Slavov} } @article {5927, title = {The Decision to Delay Social Security Benefits: Theory and Evidence}, number = {17866}, year = {2012}, institution = {National Bureau of Economic Research}, address = {Cambridge, MA}, abstract = {Social Security benefits may be commenced at any time between age 62 and age 70. As individuals who claim later can, on average, expect to receive benefits for a shorter period, an actuarial adjustment is made to the monthly benefit amount to reflect the age at which benefits are claimed. We investigate the actuarial fairness of this adjustment. Our simulations suggest that delaying is actuarially advantageous for a large subset of people, particularly for real interest rates of 3.5 percent or below. The gains from delaying are greater at lower interest rates, for married couples relative to singles, for single women relative to single men, and for two-earner couples relative to one-earner couples. In a two-earner couple, the gains from deferring the primary earner{\textquoteright}s benefit are greater than the gains from deferring the secondary earner{\textquoteright}s benefit. We then use panel data from the Health and Retirement Study to investigate whether individuals{\textquoteright} actual claiming behavior appears to be influenced by the degree of actuarial advantage to delaying. We find no evidence of a consistent relationship between claiming behavior and factors that influence the actuarial advantage of delay, including gender and marital status, interest rates, subjective discount rates, or subjective assessments of life expectancy.}, keywords = {Consumption and Savings, Employment and Labor Force, Public Policy, Social Security}, doi = {10.3386/w17866}, author = {John B. Shoven and Sita Nataraj Slavov} } @article {7776, title = {Does stock market performance influence retirement intentions?}, journal = {Journal of Human Resources}, volume = {47}, year = {2012}, pages = {1055-1081}, publisher = {47}, abstract = {Media reports predicted that the stock market decline in October 2008 would cause changes in retirement intentions, due to declines in retirement assets. We use panel data from the Health and Retirement Study to investigate the relationship between stock market performance and retirement intentions during 1998-2008, a period that includes the recent crisis. While we find a weak negative correlation between stock returns and retirement intentions, further investigation suggests that this relationship is not driven by wealth shocks brought about by stock market fluctuations, but by other factors that are correlated with both the stock market and retirement intentions. PUBLICATION ABSTRACT}, keywords = {Methodology, Net Worth and Assets, Public Policy, Retirement Planning and Satisfaction}, doi = { 10.3368/jhr.47.4.1055}, author = {Gopi Shah Goda and John B. Shoven and Sita Nataraj Slavov} } @article {7668, title = {What Explains Changes in Retirement Plans during the Great Recession?}, journal = {The American Economic Review}, volume = {101}, year = {2011}, pages = {6}, publisher = {101}, abstract = {We examine changes in subjective probabilities regarding retirement between the 2006 and 2008 waves of the Health and Retirement Study. Using a first-difference approach to eliminate individual heterogeneity, we find that the steep drop in asset prices in 2008 increased the reported probability of working at age 62 during the Great Recession. Increasing unemployment at least partly attenuated this effect, but subjective probabilities of working did not respond to changes in housing markets. Older workers{\textquoteright} probabilities of working were more sensitive to fluctuations in the stock market, but less responsive to changes in labor market conditions.}, keywords = {Employment and Labor Force, Housing, Methodology, Public Policy, Retirement Planning and Satisfaction}, doi = {10.1257/aer.101.3.29}, author = {Gopi Shah Goda and John B. Shoven and Sita Nataraj Slavov} } @article {5797, title = {Does Stock Market Performance Influence Retirement Expectations?}, number = {16211}, year = {2010}, note = {Using Smart Source Parsing National Bureau of Economic Research, Inc}, institution = {National Bureau of Economic Research}, address = {Cambridge, MA}, abstract = {While media reports predicted substantial changes in labor supply behavior due to the sharp decline in the value of the stock market in October 2008, empirical evidence on the relationship between equity markets and retirement is mixed. We use panel data from the Health and Retirement Study to investigate the relationship between stock market performance and plans for retirement during 1998-2008, a period that includes the recent financial crisis, by exploiting within-year variation in the SandP 500 index across plausibly exogenous dates of interview. While we do detect a statistically significant negative relationship between the reported probability of working full-time at age 62 and the SandP 500 index in the most recent years of our study period, we do not find strong evidence that changes in equity markets influence changes in retirement plans over the period as a whole. We conclude that the higher probabilities of working reported in recent years were likely due to factors other than stock market performance, such as pessimism about economic security more generally.}, keywords = {Consumption and Savings, Employment and Labor Force, Net Worth and Assets, Retirement Planning and Satisfaction, Women and Minorities}, doi = {10.3386/w16211}, author = {Gopi Shah Goda and John B. Shoven and Sita Nataraj Slavov} }