TY - RPRT T1 - Do Households Increase Their Savings When the Kids Leave Home? Y1 - 2015 A1 - Irena Dushi A1 - Alicia H. Munnell A1 - Geoffrey T. Sanzenbacher A1 - Anthony Webb KW - Consumption and Savings KW - Event History/Life Cycle KW - Net Worth and Assets KW - Pensions KW - Retirement Planning and Satisfaction AB - Much of the disagreement over whether households are adequately prepared for retirement reflects differences in assumptions regarding the extent to which consumption declines when the kids leave home. If consumption declines substantially when the kids leave home, as some life-cycle models of retirement saving assume, households need to achieve lower replacement rates in retirement and need to accumulate less wealth. Using administrative tax data from the Health and Retirement Study (HRS), as well as the Survey of Income and Program Participation (SIPP), this paper investigates whether household consumption declines when kids leave the home and, if so, by how much. Because consumption data are noisy and savings is the flip side of consumption, this paper examines whether savings in 401(k) plans increase when the kids leave home. The paper also investigates alternative methods of saving, including non-401(k) savings and increased mortgage payments. PB - Boston College U4 - retirement planning/survey of Income and Program Participation/household consumption/savings/401(k) participation and balances/life cycle models ER -