Projected Retirement Wealth And Savings 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:

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

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:

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."

Effects of Pensions on Savings

Author : Alan L. Gustman
Publisher :
ISBN 13 :
Total Pages : 84 pages
Book Rating : 4.3/5 (91 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 1998 with total page 84 pages. Available in PDF, EPUB and Kindle. Book excerpt:

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.

Pensions in the Health and Retirement Study

Author : Alan L. Gustman
Publisher : Harvard University Press
ISBN 13 : 9780674048669
Total Pages : 404 pages
Book Rating : 4.0/5 (486 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 404 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.

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 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.

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

Retirement Wealth and Its Adequacy

Author :
Publisher :
ISBN 13 :
Total Pages : 22 pages
Book Rating : 4.:/5 (627 download)

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Book Synopsis Retirement Wealth and Its Adequacy by :

Download or read book Retirement Wealth and Its Adequacy written by and published by . This book was released on 2001 with total page 22 pages. Available in PDF, EPUB and Kindle. Book excerpt:

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.

Assessing Knowledge of Retirement Behavior

Author : National Research Council
Publisher : National Academies Press
ISBN 13 : 9780309055475
Total Pages : 292 pages
Book Rating : 4.0/5 (554 download)

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Book Synopsis Assessing Knowledge of Retirement Behavior by : National Research Council

Download or read book Assessing Knowledge of Retirement Behavior written by National Research Council and published by National Academies Press. This book was released on 1996-08-30 with total page 292 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book brings together in one volume what researchers have learned about workers, employers, and retirees that is important for formulating retirement income policies. As the U.S. population ages, there is increasing uncertainty about the solvency of the Social Security and Medicare systems and the adequacy of private pensions to provide for people's retirement needs. The volume covers such critical behaviors as workers' decisions to retire, people's choices of saving over consumption, and employers' decisions about hiring older workers and providing pension and health care benefits. Also covered are trends in mortality, health status, and health care costs that are key to projecting the likely costs and effects of alternative retirement income security policies and a strategy for combining data and research knowledge into a policy modeling framework.

Lifetime Earnings Variability and Retirement Wealth

Author : Olivia S. Mitchell
Publisher :
ISBN 13 :
Total Pages : 42 pages
Book Rating : 4.:/5 (129 download)

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Book Synopsis Lifetime Earnings Variability and Retirement Wealth by : Olivia S. Mitchell

Download or read book Lifetime Earnings Variability and Retirement Wealth written by Olivia S. Mitchell and published by . This book was released on 2011 with total page 42 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper explores how earnings variability is related to retirement wealth. Past research has demonstrated that the average American household on the verge of retirement would need to save substantially more, in order to preserve consumption flows in old age. While several socioeconomic factors have been examined that might explain such problems, prior studies have not assessed the role of earnings variability over the lifetime as a potential explanation for poor retirement prospects. Thus two workers having identical levels of average lifetime earnings might have had very different patterns of earnings variability over their lifetimes. Such differences could translate into quite different retirement wealth outcomes. This paper evaluates the effect of earnings variability on retirement wealth using information supplied by respondents to the Health and Retirement Study (HRS). This is a rich and nationally representative dataset on Americans on the verge of retirement, with responses linked to administrative records from the Social Security Administration. Our research illuminates the key links between lifetime earnings variability and retirement wealth.

Retirement Wealth Across Cohorts

Author : Ann Huff Stevens
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (137 download)

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Book Synopsis Retirement Wealth Across Cohorts by : Ann Huff Stevens

Download or read book Retirement Wealth Across Cohorts written by Ann Huff Stevens and published by . This book was released on 2009 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Changes in labor markets over the past 30 years suggest upcoming changes in the distribution of wealth at retirement. Baby boom cohorts have spent the majority of their prime earnings years in a labor market with increased earnings inequality. This paper investigates how changes in lifetime earnings distributions affect the distribution of retirement wealth among cohorts retiring over the next decade. I use data from the Health and Retirement Study from 1992 to 2004 to estimate the relationship between lifetime earnings, pre-retirement private wealth and Social Security wealth. I show that changes in the lower half of the male earnings distribution explain a substantial portion of changes in the distribution of pre-retirement wealth. Growth in women's earnings across the cohorts do not offset these declines in wealth associated with male earnings. When pensions are added to the measure of wealth, the role of earnings is even larger, reflecting a strong correlation between changes in earnings across these cohorts and changes in the values of their employer-provided pensions. These pension changes do not appear to operate via changes in pension structures (defined benefit versus defined contribution). The present value of wealth from future Social Security benefits, in contrast, grows in real terms throughout most of the distribution. At the bottom of the male distribution of Social Security wealth, reductions in lifetime earnings limit this growth in real benefits, while at the top of the distribution earnings growth amplifies expected growth in Social Security wealth.

Retirement Income Adequacy With Immediate and Longevity Annuities

Author : Youngkyun Park
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (137 download)

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Book Synopsis Retirement Income Adequacy With Immediate and Longevity Annuities by : Youngkyun Park

Download or read book Retirement Income Adequacy With Immediate and Longevity Annuities written by Youngkyun Park and published by . This book was released on 2011 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper updates with recent information and estimates on retirement and health care expenditures a previous EBRI analysis (from 2006), which quantified how different types of risk (investment income, longevity, and long-term care risk), asset allocation, and percentage of annuitization affect retirement income adequacy. It analyzes how differently immediate and longevity annuities can affect probable income adequacy in retirement by taking into account long-term health care expenditures. Specifically, it attempts to find the optimal level of annuitization and asset allocation that would provide a desired level of confidence that individuals will have sufficient retirement income, based on the three different types of risk: investment income, longevity, and long-term care. Immediate annuities, as the name implies, begin distributions to the owner as soon as they are purchased; longevity annuities delay distributions to a specified later age, to help protect the owner against the risk of outliving his or her assets. Key findings include the following: Annuitization by using either immediate or longevity annuities appears to be more effective for retirees with low income than those with high income to reach a desired level of retirement income adequacy under certain conditions. As previous research has shown, adding in retiree health and long-term care costs to the retirement calculation dramatically increases estimated retirement costs - and the initial retirement wealth needed to finance those costs. The impact of an immediate annuity on retirement income adequacy: Simulation results show that for a male retiring at 65 facing investment and longevity risk, who desires a 90 percent chance of retirement income adequacy with an immediate annuity, could optimally achieve that target by fully annuitizing his initial retirement wealth regardless of different equity allocations in his portfolio. However, if he is assumed to be facing investment, longevity, and long-term care risk, he would need to annuitize 80-90 percent (not 100 percent) of his initial retirement wealth; some portion of his initial retirement wealth should be reserved to finance unexpected long-term care costs. The impact of a longevity annuity on retirement income adequacy: To achieve the same (90 percent) chance of retirement income adequacy with a longevity annuity, simulation results show that when the retiree faces all the three types of risk (investment, longevity, and long-term care risk), he should increase the allocation of his initial retirement wealth to both a longevity annuity and equities in his portfolio, compared with when he faces only investment and longevity risk. The increased allocations to a longevity annuity and equities are to cover the unexpected significant long-term care costs.