Projected Retirement Wealth And Saving Adequacy In The Health And Retirement Study

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Projected Retirement Wealth and Savings Adequacy in the Health and Retirement Study

Author : James F. Moore
Publisher :
ISBN 13 :
Total Pages : 60 pages
Book Rating : 4.3/5 (91 download)

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Book Synopsis Projected Retirement Wealth and Savings Adequacy in the Health and Retirement Study by : James F. Moore

Download or read book Projected Retirement Wealth and Savings Adequacy in the Health and Retirement Study written by James F. Moore and published by . This book was released on 1997 with total page 60 pages. Available in PDF, EPUB and Kindle. Book excerpt: Low saving rates raise questions about Americans' ability to maintain consumption levels in old age. Using the Health and Retirement Study, this paper explores asset holdings among a nationally representative sample of people on the verge of retirement. Making reasonable projections about asset growth, we assess how much more people would need to save in order to preserve consumption levels after retirement. We find that the median older household has current wealth of approximately $325,000 including pensions, social security, housing, and other financial wealth, an amount projected to grow to about $380,000 by retirement at age 62. Nevertheless, our model suggests that this median household will still need to save 16% of annual earnings to preserve pre-retirement consumption. For retirement at age 65, assets are expected to be about $420,000 and required additional saving totals 7% of earnings per year. These summary statistics conceal extraordinary heterogeneity in both assets and saving needs in the older population. Older high wealth households have 45 times more assets than the poorest decile and this disparity increases with age. There are also large differences in prescribed saving targets, ranging from 38% of annual earnings for those in the lowest wealth decile to negative rates for the wealthiest decile.

PROJECTED RETIREMENT WEALTH AND SAVING ADEQUACY IN THE HEALTH AND RETIREMENT STUDY

Author : James F. MOORE
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (119 download)

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Book Synopsis PROJECTED RETIREMENT WEALTH AND SAVING ADEQUACY IN THE HEALTH AND RETIREMENT STUDY by : James F. MOORE

Download or read book PROJECTED RETIREMENT WEALTH AND SAVING ADEQUACY IN THE HEALTH AND RETIREMENT STUDY written by James F. MOORE and published by . This book was released on 1997 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Saving, Wealth, and Retirement

Author : Surachai Khitatrakun
Publisher :
ISBN 13 :
Total Pages : 182 pages
Book Rating : 4.:/5 (89 download)

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Book Synopsis Saving, Wealth, and Retirement by : Surachai Khitatrakun

Download or read book Saving, Wealth, and Retirement written by Surachai Khitatrakun and published by . This book was released on 2003 with total page 182 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Forecasting Retirement Needs and Retirement Wealth

Author : Olivia S. Mitchell
Publisher : University of Pennsylvania Press
ISBN 13 : 9780812235296
Total Pages : 392 pages
Book Rating : 4.2/5 (352 download)

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Book Synopsis Forecasting Retirement Needs and Retirement Wealth by : Olivia S. Mitchell

Download or read book Forecasting Retirement Needs and Retirement Wealth written by Olivia S. Mitchell and published by University of Pennsylvania Press. This book was released on 2000 with total page 392 pages. Available in PDF, EPUB and Kindle. Book excerpt: Many new retirement-related opportunities and risks confront individuals and employers in the 21st century. Opportunities include the exciting prospects of living longer, living healthier, and living a more productive life than ever before. But the risks are also huge, including the challenge of setting an income goal and then saving enough for retirement, investing wisely in a time of financial turmoil, and planning carefully for a long period of time in retirement. What are retirement needs and how much will we need to save for old age? What is retirement becoming, especially in an era of downsizing and early retirement? What assets should we hold prior to and throughout the retirement period? How should we invest our pension assets, and how can education influence 401(k) plan saving? How important are employer-provided pensions and social security in protecting retirees against old-age poverty? And what special problems do minorities and women face? Forecasting Retirement Needs and Retirement Wealth draws on the latest information available on health, wealth, and retirement in America, to offer new perspectives on ways to support the expanding population of older citizens. As these novel paths to retirement emerge, paths that involve "bridge" jobs and gradual transitions through various states of employment, they force new thinking on the concept and process of retirement. Contributors explore the difficult problem of determining what resources people need during retirement and offer ways to think about how much to save for old age.Also in the Pension Research Council Publications series-- Prospects for Social Security Reform Edited by Olivia S. Mitchell, Robert J. Myers, and Howard Young ISBN 0-8122-3479-0 / Cloth Living with Defined Contribution Pensions Remaking Responsibility for Retirement Edited by Olivia S. Mitchell and Sylvester J. Schieber ISBN 0-8122-3439-1 / Cloth Positioning Pensions for the Twentieth-First Century Edited by Michael S. Gordon, Olivia S. Mitchell, and Marc M. Twinney ISBN 0-8122-3391-3 / Cloth

Effects of Pensions on Savings

Author : Alan L. Gustman
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (137 download)

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Book Synopsis Effects of Pensions on Savings by : Alan L. Gustman

Download or read book Effects of Pensions on Savings written by Alan L. Gustman and published by . This book was released on 2000 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines the composition and distribution of total wealth for a cohort of 51 to 61 year olds from the Health and Retirement Study (HRS), and the role of pensions in forming retirement wealth. Pension coverage is widespread, covering two thirds of households and accounting for one quarter of accumulated wealth. Social security benefits account for another quarter of total wealth. As calculated from earnings records, the present discounted value of social security benefits is less than the present value of taxes paid. Earlier than many expect, social security is already a poor investment on average for this cohort on the verge of retirement. When pensions and social security are included, wealth accumulated by the HRS population to date is substantial. At their expected retirement date, using only the wealth accumulated by their mid-fifties, the HRS household with median replacement rate could finance a fixed, nominal two-thirds joint and survivor annuity replacing 79 percent of last earnings, and a real annuity replacing 52 percent of last earnings. Replacement rates for median earners are higher. Additional savings made over the seven years remaining until retirement will raise those replacement rates by about a fifth. When measured against a standard of adequacy based on average yearly earnings over the worklife, with adjustments made for the absence of preretirement savings, children, taxes, work related expenses and other factors, these replacement rates appear adequate. Lifetime earnings are measured for each individual in the HRS from social security earnings records augmented by self reported earnings histories. When pensions and social security are counted in total wealth, the ratio of wealth to lifetime earnings declines from very high levels in the bottom ten percent of the earnings distribution, remains at roughly 40 percent from the 25th through 95th percentile of the lifetime earnings distribution, and then falls to 32 percent for those in the top five percent of the earnings distribution. This result is consistent with the predictions of a simple, stripped down life cycle model. Also consistent is a finding that the ratio of wealth to lifetime earnings is no higher for those with pensions than for those without pensions. However, heterogeneity is quite important. Real estate and business wealth are a larger share of total wealth for those without pensions, reflecting the importance of self employment in wealth accumulation. Multivariate regressions relating total wealth to pension coverage and pension value, which standardize for sources of heterogeneity, suggest that pensions cause very limited displacement of other wealth, if any. Pensions add to total wealth by at least half the value of the pension, and in most estimates by a good deal more. These findings are not consistent with a simple life cycle explanation for savings. They also raise questions about whether pensions are fundamentally a tax avoidance device, allowing substitution of pension for nonpension savings.

Aging and the Macroeconomy

Author : National Research Council
Publisher : National Academies Press
ISBN 13 : 0309261961
Total Pages : 230 pages
Book Rating : 4.3/5 (92 download)

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Book Synopsis Aging and the Macroeconomy by : National Research Council

Download or read book Aging and the Macroeconomy written by National Research Council and published by National Academies Press. This book was released on 2013-01-10 with total page 230 pages. Available in PDF, EPUB and Kindle. Book excerpt: The United States is in the midst of a major demographic shift. In the coming decades, people aged 65 and over will make up an increasingly large percentage of the population: The ratio of people aged 65+ to people aged 20-64 will rise by 80%. This shift is happening for two reasons: people are living longer, and many couples are choosing to have fewer children and to have those children somewhat later in life. The resulting demographic shift will present the nation with economic challenges, both to absorb the costs and to leverage the benefits of an aging population. Aging and the Macroeconomy: Long-Term Implications of an Older Population presents the fundamental factors driving the aging of the U.S. population, as well as its societal implications and likely long-term macroeconomic effects in a global context. The report finds that, while population aging does not pose an insurmountable challenge to the nation, it is imperative that sensible policies are implemented soon to allow companies and households to respond. It offers four practical approaches for preparing resources to support the future consumption of households and for adapting to the new economic landscape.

Lifetime Earnings, Social Security Benefits, and the Adequacy of Retirement Wealth Accumulation

Author : Eric M. Engen
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (137 download)

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Book Synopsis Lifetime Earnings, Social Security Benefits, and the Adequacy of Retirement Wealth Accumulation by : Eric M. Engen

Download or read book Lifetime Earnings, Social Security Benefits, and the Adequacy of Retirement Wealth Accumulation written by Eric M. Engen and published by . This book was released on 2004 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper provides new evidence on the adequacy of household retirement saving. We depart from much previous research on the adequacy of saving in two key ways. First, our underlying simulation model of optimal wealth accumulation allows for precautionary saving against uncertain future earnings. Second, we employ data on lifetime earnings. Using data from the 1992 Health and Retirement Study, we find that households at the median of the empirical wealth-lifetime earnings distribution are saving as much or more as the underlying model suggests is optimal, and households at the high end of the wealth distribution are saving significantly more than the model indicates. But we also find significant undersaving among the lowest 25 percent of the population. We show that reductions in Social Security benefits could have significant deleterious effects on the adequacy of saving, especially among low-income households. We also show that, controlling for lifetime earnings, households with high current earnings tend to save far more adequately than other households.

Retirement Wealth Accumulation and Decumulation

Author : Olivia S. Mitchell
Publisher :
ISBN 13 :
Total Pages : 92 pages
Book Rating : 4.3/5 (91 download)

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Book Synopsis Retirement Wealth Accumulation and Decumulation by : Olivia S. Mitchell

Download or read book Retirement Wealth Accumulation and Decumulation written by Olivia S. Mitchell and published by . This book was released on 1997 with total page 92 pages. Available in PDF, EPUB and Kindle. Book excerpt: Analysts have raised questions about current workers' ability and inclination to save" enough for retirement. This issue is of obvious policy interest given the current debate over" reforming national retirement income programs. This paper explores the implications of recent" research regarding retirement wealth accumulation and decumulation for this debate. Our goal is" to identify problems and opportunities in the area of preparedness for retirement."

Growing Older in America

Author :
Publisher :
ISBN 13 :
Total Pages : 108 pages
Book Rating : 4.:/5 (891 download)

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Book Synopsis Growing Older in America by :

Download or read book Growing Older in America written by and published by . This book was released on 2007 with total page 108 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Pensions in the Health and Retirement Study

Author : Alan L. Gustman
Publisher : Harvard University Press
ISBN 13 : 0674048660
Total Pages : 401 pages
Book Rating : 4.6/5 (74 download)

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Book Synopsis Pensions in the Health and Retirement Study by : Alan L. Gustman

Download or read book Pensions in the Health and Retirement Study written by Alan L. Gustman and published by Harvard University Press. This book was released on 2010-05 with total page 401 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book presents a careful analysis of pension data collected by the Health and Retirement Study, a unique survey of people over the age of fifty conducted by the University of Michigan for the National Institute on Aging. The authors studied pensions as they evolve over individuals’ work lives and into retirement: how pension coverage and plans change over a lifetime, how many pensions workers have by the time they retire and what these pensions are worth, what pensions contribute to individual retirement incomes, and how trends and policy changes affect retirement plans. The book focuses on the major features of pensions, including plan type and participation, ages of eligibility for retirement, values of different pension types, how pension values are influenced by retirement age, how plans are settled when a worker leaves a firm, how well people understand their pensions, the importance of pensions in retirement saving and as a share of household wealth, and the vulnerability of the retirement age population to the current financial crisis. This book provides readers with an invaluable look at the crucial but ever-changing role of pensions in supporting retirees.

Imperfect Knowledge, Retirement and Saving

Author : Alan L. Gustman
Publisher :
ISBN 13 :
Total Pages : 72 pages
Book Rating : 4.3/5 (91 download)

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Book Synopsis Imperfect Knowledge, Retirement and Saving by : Alan L. Gustman

Download or read book Imperfect Knowledge, Retirement and Saving written by Alan L. Gustman and published by . This book was released on 2001 with total page 72 pages. Available in PDF, EPUB and Kindle. Book excerpt: Using data from the Health and Retirement Study, this paper creates variables measuring knowledge about future social security and pension benefits by comparing respondent reports of their expected benefits with benefits calculated from social security earnings records and employer provided descriptions of pension plans. The knowledge measures suggest that misinformation, imprecision and lack of information about retirement benefits is the norm. Those who are most dependent on social security are the least well informed about their social security benefits, while those who are most dependent on pensions are best informed about their pension benefits. Women and minorities are less well informed about both types of retirement benefits. Having documented the extent of misinformation, we turn to questions about the production of information, and the consequences of misinformation for real outcomes. Relating measures of information to planning activities, we find that those who plan are somewhat better informed than those who do not, but with the exception of having requested a social security earnings record, the effects of planning activities on knowledge are modest. In descriptive and reduced form equations for planned and actual retirement and saving, there is at best a modest relation of knowledge measures to planned and actual retirement and to nonpension, nonsocial security wealth as a share of lifetime earnings. Individuals who overestimate their benefits are likely to retire sooner than they planned, but the measured effects are relatively modest. Coefficients of measures of the increase in reward from postponed retirement are barely affected by the addition of measures of respondent knowledge of their retirement benefits to standard reduced form retirement and wealth equations.

Retirement Wealth and Its Adequacy

Author : Catherine Phillips Montalto
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (137 download)

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Book Synopsis Retirement Wealth and Its Adequacy by : Catherine Phillips Montalto

Download or read book Retirement Wealth and Its Adequacy written by Catherine Phillips Montalto and published by . This book was released on 2010 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper assesses whether the accumulated retirement wealth of pre-retirees will be adequate to cover needs during retirement, and how variation in age of eligibility for Social Security benefits affects adequacy. Data from the 1998 Survey of Consumer Finances are analyzed to assess the adequacy and composition of retirement wealth of U.S. households, and simulations are used to assess the impact of changes in the Social Security system. Unique contributions of the research include use of household specific information on portfolio allocation and planned retirement age, projection of retirement wealth using asset specific growth rates, and estimation of retirement needs based on household expenditure functions. The findings reveal that the average U.S. household receives approximately 46% of retirement wealth from Social Security, 39% from personal savings, and 14% from pensions. Approximately 56% of U.S. households are on track to be able to maintain their pre-retirement consumption level in retirement. However, retirement wealth adequacy rates and retirement wealth to needs ratios both increase with planned retirement age of the householder. Based on simulations, the impact of changes in the age of eligibility for full Social Security benefits on retirement wealth adequacy depends on behavioral responses to these changes.

Are Americans Saving Enough for Retirement?

Author : Cori E. Uccello
Publisher :
ISBN 13 :
Total Pages : 16 pages
Book Rating : 4.E/5 ( download)

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Book Synopsis Are Americans Saving Enough for Retirement? by : Cori E. Uccello

Download or read book Are Americans Saving Enough for Retirement? written by Cori E. Uccello and published by . This book was released on 2001 with total page 16 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Effects of Pensions on Saving

Author : Thomas L. Steinmeier
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (874 download)

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Book Synopsis Effects of Pensions on Saving by : Thomas L. Steinmeier

Download or read book Effects of Pensions on Saving written by Thomas L. Steinmeier and published by . This book was released on 1998 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines the composition and distribution of total wealth for a cohort of 51 to 61 year olds from the Health and Retirement Study (HRS), and the role of pensions in forming retirement wealth. Pension coverage is widespread, covering two thirds of households and accounting for one quarter of accumulated wealth. Social security benefits account for another quarter of total wealth. As calculated from earnings records, the present disco value of social security benefits is less than the present value of taxes paid. Earlier than many expect, social security is already a poor investment on average for this cohort on the verge of retirement. Lifetime earnings are measured for each individual in the HRS from social security earnings records augmented by self reported earnings histories. This result is consistent with the predictions of a stripped down life cycle model. Also consistent is a finding that the ratio of wealth to lifetime earnings is no higher for those with pensions than for those without pensions. Multivariate regressions relating total wealth to pension coverage and pension value, suggest that pensions cause very limited displacement of other wealth, if any. Pensions add to total wealth by at least half the value of the pension, and in most estimates by a good deal more. These findings are not consistent with a simple life cycle explanation for savings. They also raise questions about whether pensions are fundamentally a tax avoidance device, allowing substitution of pension for nonpension savings

Adequacy of Preparation for Retirement

Author : Yoonkyung Yuh
Publisher :
ISBN 13 :
Total Pages : 374 pages
Book Rating : 4.:/5 (44 download)

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Book Synopsis Adequacy of Preparation for Retirement by : Yoonkyung Yuh

Download or read book Adequacy of Preparation for Retirement written by Yoonkyung Yuh and published by . This book was released on 1998 with total page 374 pages. Available in PDF, EPUB and Kindle. Book excerpt: Simulation results show that stock investments significantly increase the accumulation of adequate wealth for retirement, and also significantly reduce the required saving rates to compensate for the gap between retirement wealth and consumption needs of households with inadequate retirement wealth.

Securing a Retirement Income for Life

Author : Bill Griffith, Jr.
Publisher : W E Griffith Publications
ISBN 13 : 9780978550608
Total Pages : 212 pages
Book Rating : 4.5/5 (56 download)

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Book Synopsis Securing a Retirement Income for Life by : Bill Griffith, Jr.

Download or read book Securing a Retirement Income for Life written by Bill Griffith, Jr. and published by W E Griffith Publications. This book was released on 2006 with total page 212 pages. Available in PDF, EPUB and Kindle. Book excerpt: How much you need to finance your retirement depends on how well you want to live and the expected length of your retirement life. Do you want to maintain or increase your standard of living? Do you want to start a new business, provide financial help to family members or engage in a new hobby or activity? How much you need to accumulate depends on the lifestyle you envision. Securing a Retirement Income for Life will show you how much you need to accumulate to provide a retirement income for life and how to implement the very best strategies for managing, protecting and preserving your wealth. The interactive nature of this new book will show you how to go about planning to meet your retirement needs and objectives and how best to prepare for uncertainties when the future is unknown. For many people, retirement may represent the longest stage of their life. It is a time when they can look forward to a whole new range of exciting challenges and activities - to experience their own vision - with the same passion, excitement and sense of accomplishment they had during the first part of their life. Along with a much longer life, however, comes more complex and much more expensive financial challenges. This book will help you prepare for the many challenges and uncertainties that lie ahead as you approach retirement and during your retirement years, such as the potential risk of outliving your money. The shift away from defined benefit plans to defined contribution plans is a trend that has revolutionized retirement planning by placing more of the responsibility for saving on the individual. Since fewer retirees in the future can expect to receive a steady stream of income from employer provided defined benefit plans, individuals will have to rely more on their own resources for a much higher percentage of their retirement income. According to author and Certified Financial Planner practitioner, Bill Griffith, Jr., CFP, "people are faced with having to make serious decisions about how to manage their company retirement plan, how much to contribute, how to invest their money and what to do with their vested balance after they retire." "They need to have a plan based on clear and accurate information to help them make decisions about when to retire, how long they can expect to live in retirement, how much they need to accumulate and how to manage their funds throughout their retirement years." The investment needed to finance retirement depends on an accurate forecast of expenditures and rate of return assumptions well into the future. The uncertainty of traditional return assumptions and rising healthcare costs are both significant risks in retirement and can have a tremendous impact on retirement savings and security. Decisions about when to retire, how long you can expect to live in retirement and how much you need to accumulate are complicated by an ever changing set of circumstances. Throughout this book, the author emphasizes a process-driven approach for facing these and other critical issues in retirement. You will learn about the proper methods for managing retirement funds and how to protect against the risk of funding long-term liabilities. Meeting financial obligations through an investment-based approach is only one part of the process. Securing a Retirement Income for Life will show you how to use a combination of methods to assure that your retirement income will last for life.

Retirement and Wealth

Author : Alan L. Gustman
Publisher :
ISBN 13 :
Total Pages : 84 pages
Book Rating : 4.3/5 (91 download)

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Book Synopsis Retirement and Wealth by : Alan L. Gustman

Download or read book Retirement and Wealth written by Alan L. Gustman and published by . This book was released on 2001 with total page 84 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper estimates reduced form retirement and wealth equations, and analyzes the relationship between them. Data are from the first four waves of the longitudinal Health and Retirement Study, individuals born from 1931 to 1941. Single equation retirement models relate the probability of retiring to forward looking measures of changes in the values of social security and pension benefits when retirement is postponed. Such simple models suggest that if the social security early retirement age were to be raised or abolished, more people would retire earlier rather than later. Our work analyzes the reasons for such counter intuitive predictions, and discusses the need to analyze these policies in the context of a structural model of retirement and wealth. To improve retirement analysis, we develop the premium value, a measure of the future value of pensions and social security that better reflects the accrual of benefits under defined contribution plans. We also introduce a new definition of retirement to blend information on objective hours worked with subjective self reports of retirement status. Our findings also explore the effects of social security incentives on partial retirement, and consider the importance of partial retirement in any study relating social security to retirement behavior.