%0 Report %D 2023 %T Do Older Adults Accurately Forecast Their Social Security Benefits? %A Seiter, Grant M. %A Sita Nataraj Slavov %K Expectations %K Retirement Planning %K Social Security Benefits %X How accurate are older people’s expectations about their future Social Security benefits? Using panel data from the Health and Retirement Study, we compare respondents’ 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). %B Working Paper %I NBER %G eng %R 10.3386/w31023 %0 Web Page %D 2023 %T Dollars and sense: The case for teaching personal finance %A Crawford, Krysten %K Financial literacy %K Personal finance %K Retirement Planning %I Institute for Economic Policy Research, Stanford University %G eng %U https://siepr.stanford.edu/news/dollars-and-sense-case-teaching-personal-finance %0 Web Page %D 2023 %T How Social Security Statements Help Retirement Planning %A Markowitz, Andy %K Retirement Planning %K Social Security %I AARP %G eng %U https://www.aarp.org/retirement/social-security/info-2023/statements-and-retirement-planning.html %0 Journal Article %J Journal of Financial Planning %D 2021 %T Right-Sizing Retirement: Exploring the Retirement Consumption Gap in Early Retirement %A David Blanchett %A Cormier, Warren %K consumption %K Early retirement %K Financial planning %K Investments %K Personal finance %K Retirement %K Retirement Planning %X * Research suggests some households underspend in retirement, resulting in a "retirement consumption gap." This paper explores this effect, specifically during the first 10 years of retirement, and incorporates both household assets and preretirement spending using data from the Health and Retirement Study. * Only 18 percent of households have enough wealth to cover pre-retirement consumption when they retire, which suggests most households will not be able to maintain their pre-retirement lifestyle in retirement-a finding consistent with other general estimates of the retirement readiness of Americans. * Real financial assets decline for 65 percent of households during the first 10 years of retirement, with a median real decline of 35 percent. * Real retiree spending declines for 75 percent of households during the first 10 years of retirement, with a median annual decline of approximately 2 percent per year. This suggests financial planners should consider changes in retirement spending that are less than inflation as part of a retirement plan. The percentage of households that can fund their retirement consumption increases dramatically during the first 10 years of retirement, from 18 percent to 48 percent, primarily due to reductions in spending. This suggests households "right-size" their spending early in retirement to better align with available resources. It is not clear, though, to what extent this behavior persists further into retirement (due to data limitations). Many well-funded households could increase consumption, but appear not to do so (i.e., exhibit a retirement consumption gap). Potential reasons include the desire to leave a bequest, uncertain medical expenses (especially late in retirement), uncertain life expectancy, etc. While this group is a minority of retiree households, understanding what drives this behavior is especially important to financial planners since this group tends to have the most accumulated wealth and are, therefore, more likely to seek the services of, or use, a financial planner. %B Journal of Financial Planning %V 34 %P 68-81 %@ 10403981 %G eng %N 2 %0 Journal Article %J Work, Aging and Retirement %D 2020 %T Boundaries of the Construct of Unemployment in the Preretirement Years: Exploring an Expanded Measurement of Lost-Work Opportunity %A Voss, M.W. %A Al Snih, S. %A Li, Wei %A Hung, M. %A Richards, L.G. %A Wang, M. %K Retirement %K Retirement Planning %K Work %X There is uncertainty related to whether retirement negatively affects health - possibly due to complexity around retirement decisions. Lost-work opportunity through unemployment or forced retirement has been shown to negatively affect health. Lost-work opportunity can be captured in two measurement fields, either a reported experience of being forced into retirement or reported unemployment. However, 17% of individuals retiring due to the loss of work opportunity identified in qualitative interviewing (i.e., unemployment, temporary lay-offs, company buy-outs, forced relocations, etc.) do not report this unemployment or involuntary retirement in quantitative survey responses. We propose broadening the conceptualization of late-career unemployment to incorporate other lost work opportunity scenarios. Using the Health and Retirement Study (HRS), a lost-work opportunity score (LOS) was computed from items indicating unemployment and forced or unplanned retirement. Correlations were computed between this LOS and all continuous variables in the RAND longitudinal compilation of the HRS to determine its convergent and discriminant validity. The LOS demonstrated a Chronbach's alpha of α =. 82 and had convergent validity with constructs of employment (9 variables), finances (36 variables), and health (14 variables), as predicted by the literature on retirement timing. No other continuous variables in the HRS were identified with a moderate or strong correlation to LOS, demonstrating discriminant validity. Further research should explore whether a combination of variables in the HRS can improve the accuracy of measuring lost-work opportunity. Improved precision in measurement, through an expanded conceptualization of lost-work opportunity, may help explicate the retirement-related factors that affect health, to inform policy and support healthy aging decisions at a societal level. %B Work, Aging and Retirement %V 6 %P 59-63 %G eng %N 1 %R 10.1093/workar/waz006 %0 Journal Article %J Journal of Health Care Finance %D 2020 %T Financial Sophistication and Private Long-term Care Insurance Purchase Decision %A Rashmita Basu %K financial sophistication %K Long-Term care insurance purchase %K Retirement Planning %X Despite significant financial risk associated with long-term care expenditure, the market for private long-term care insurance (LTCI) remains severely limited. Understanding the sources of such under-insurance is important to evaluate any potential reforms to strengthen the private LTCI market so that it becomes a significant source of financing long-term care services and supports for the elderly. Considering LTCI as a form of retirement planning, one would expect an individual's financial literacy to affect their LTCI purchasing decision. Implementing an instrumental variable approach, the current study isolates the causal impact of financial sophistication on optimal decision to purchase a private LTCI coverage. Consistent with the literature on retirement planning, results show that individuals with more sophisticated financial knowledge were likely to purchase a private LTCI coverage. %B Journal of Health Care Finance %G eng %U http://healthfinancejournal.com/index.php/johcf/article/view/208 %9 Journal %0 Journal Article %J American Economic Association Papers and Proceedings %D 2020 %T Legal Access to Reproductive Control Technology, Women’s Education, and Earnings Approaching Retirement %A Jason Lindo %A Mayra Pineda-Torres %A David Pritchard %A Hedieh Tajali %K Reproduction %K Retirement Planning %K women's education %K Women's Health %X What do historical changes in legal access to reproductive health care technology tell us about the long-run effects of such changes? We investigate this question using data from the Health and Retirement Study and an identification strategy leveraging variation in exposure to legal changes in access across cohorts born in the same states. We find positive effects on educational attainment that align with prior work but are not statistically significant. We also find positive effects on working in a Social Security-covered job in women's 20s and 30s but no evidence of positive effects on women's earnings in their 50s. %B American Economic Association Papers and Proceedings %V 110 %P 231-35 %G eng %R 10.1257/pandp.20201108 %0 Report %D 2020 %T Older Americans' Spending Profiles: One Size Does Not Fit All %A Zahra Ebrahimi %K CAMS %K Retirement Planning %K spending patterns %X Understanding the spending patterns of the elderly and forming an educated estimate of households’ budgets throughout households’ old age is a key element of retirement planning. In this Issue Brief, the Employee Benefit Research Institute (EBRI) explores variations in spending of older households using the Health and Retirement Study (HRS) and the Consumption and Activities Mail Survey (CAMS). The analysis also seeks to identify the factors that are correlated with spending patterns in order to provide additional insight for approaches to saving and investment for retirement. Such analysis can also help in the development of more effective withdrawal strategies during retirement. %B EBRI Issue Brief %I Employee Benefit Research Institute %C Washington, D.C. %G eng %U https://www.ebri.org/content/older-americans'-spending-profiles-one-size-does-not-fit-all %0 Report %D 2020 %T Still shortchanged: An update on women's retirement preparedness %A Bond, Tyler %A Saad-Lessler, Joelle %A Christian Weller %K Caregiving %K Divorce %K Retirement Planning %K women %X Most Americans struggle to adequately save for retirement, but women face unique challenges in saving, largely stemming from a gender pay gap that persists into a retirement wealth gap. This update of previous research from the National Institute on Retirement Security (NIRS) takes a fresh look at the data on women’s retirement preparedness. Relying on data from the 2014 Survey of Income and Program Participation (SIPP), this research finds that older women receive approximately 80 percent of the retirement income that older men receive - nearly identical to the gender pay gap for American women. The data also reveals that different groups of women have very different retirement experiences, with older women in a first marriage faring better than the rest, and widows, especially those age 80 and older, seeing a marked decline in income. The report’s key findings are as follows: • In 2016, women age 65 and older had a median household retirement income of $47,244 or 83 percent of median household income for men ($57,144). • Women earn less than men over the course of their career. Men with savings in a defined contribution (DC) plan far surpass the earnings trajectory of women with savings in a DC plan, and earn significantly more than women without DC savings. • Women experience a steep decline in income past age 80. Women age 80 and older are much more likely to be widows and widowhood presents challenges on both the income and cost side of retirement. • There are stark differences in the sources of income for women in the top and bottom income quintiles. Women with less than $20,000 of income in retirement are much more dependent on Social Security income, whereas women with income above $80,000 receive much more from earnings and property income. • Divorce presents a complex set of issues relating to retirement preparedness. The timing of divorce seems to matter, as does the division of assets following a divorce. • Caregiving, especially spousal caregiving, has a strong effect on retirement preparedness, and this particularly impacts women as they remain much more likely to provide caregiving than men. %B National Institute on Retirement Security %I National Institute on Retirement Security %C Washington, D.C. %G eng %U https://www.nirsonline.org/wp-content/uploads/2020/04/Still-Shortchanged-Final.pdf %0 Web Page %D 2019 %T Are pre-retirees in the gig economy prepared for retirement? %A Thornton, Nick %K Economy %K Retirement Planning %X For some in the so-called gig economy, independence has not meant sacrificing retirement savings. But they're a minority, a Pew Charitable Trusts study finds. %B Benefits Pro %I Benefits Pro %V 2019 %G eng %U https://www.benefitspro.com/2019/09/13/are-pre-retirees-in-the-gig-economy-prepared-for-retirement/?slreturn=20190830174151 %9 tABLOID %0 Thesis %B Social Work %D 2019 %T Beyond Wealth and Health: Psycho-Social Factors and Retirement Planning and Expectations in the U.S. %A Wang, Yihan %K family and work %K personal mastery %K retirement expectation %K Retirement Planning %K retirement satisfaction %K Social work %X Retirement is a significant transition in an individual’s life course. More and more people are working past traditional retirement ages. Planning before retirement has been shown to relate to a number of positive outcomes and lead to a smoother transition to a retired life, such as more retirement savings, better retirement satisfaction, better social life, health, and mental health. However, most of the studies about retirement to date have focused on the impact of health and wealth in preparing for a successful retirement. This dissertation examines three issues related to retirement planning and expectations: (1) How do work and family relationships relate to having a plan to reduce or stop work and expected retirement timing in late life, and are there gender and occupational differences in these relationships? (2) How do workplace experiences relate to expectations to retire earlier or later than what is normative in different occupations? (3) Does sense of control explain the relationship between involuntary retirement and retirement satisfaction? To answer the three questions, the author adopts the role theory, the age norm theory, and the theory of self-efficacy to explain the background and findings. The data for this dissertation comes from the Health and Retirement Study (HRS), a nationally representative dataset that captures the information about the health and retirement issues among adults over age 50 in the U.S. This proposed study uses pooled cross-sectional data from waves 2012 and 2014. Ordinary least squares (OLS) regression and logistic regression were used to examine the effect of work and family relationships and the plans/retirement timing of pre-retirees. Multinomial logistic regression was used to examine workplace factors that contribute to the non-normative retirement age expectations. Mediation analysis was used to study how personal mastery, perceived constraints, and domain-specific control mediates the relationship between involuntary retirement and retirement satisfaction. %B Social Work %I Boston College University %C Newton, MA %V Ph.D. %P 179 %8 2019 %G eng %U https://dlib.bc.edu/islandora/object/bc-ir:108593 %0 Book Section %B Redefining Retirement: How Will Boomers Fare? %D 2007 %T Saving Between Cohorts: The Role of Planning %A Annamaria Lusardi %A Beeler, Jason %E Brigitte C. Madrian %E Olivia S. Mitchell %E Beth J Soldo %K adequacy %K Baby Boomer %K Education %K Housing %K Income %K minorities %K Retirement Planning %K Saving %X We compare the saving behavior of two cohorts: the Early Baby Boomers (EBB, age 51- 56 in 2004) and the HRS cohort (age 51-56 in 1992). We find that EBB have accumulated more wealth than the previous cohort but they benefited from a large increase in house prices, which lifted the wealth of many home-owners. In fact, there are many families among EBB, particularly those headed by respondents with low education, low income, and minorities, which have less wealth than the previous cohort. Lack of wealth can be traced to lack of retirement planning. Notwithstanding the many initiatives aimed at fostering planning in the 1990s, a large portion of EBB still do not plan for retirement even though most respondents are close to it. The effect of planning is remarkably similar between the two cohorts; those who do not plan accumulate much lower amounts of wealth from 20 to 45 percent depending on the location in the wealth distribution- than those who do plan. Thus, for both the EBB and the HRS cohort, lack of planning is tantamount to lack of saving irrespective of the many changes in the economy between 1992 and 2004. %B Redefining Retirement: How Will Boomers Fare? %I Oxford University Press %C New York, NY %G eng %U https://oxford.universitypressscholarship.com/view/10.1093/acprof:oso/9780199230778.001.0001/acprof-9780199230778-chapter-13 %L wp_2006/MRRCwp122.pdf %4 COHORT/Wealth Accumulation %$ 16680