Precautionary Saving Wealth Accumulation And Pensions

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Precautionary Saving Wealth Accumulation And Pensions

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Author : Peter Corstiaan Santen
language : en
Publisher:
Release Date : 2013

Precautionary Saving Wealth Accumulation And Pensions written by Peter Corstiaan Santen and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2013 with categories.

Precautionary Saving Over The Lifecycle

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Author : John Laitner
language : en
Publisher:
Release Date : 2008

Precautionary Saving Over The Lifecycle written by John Laitner and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2008 with categories.

This paper studies the quantitative importance of precautionary wealth accumulation relative to life-cycle saving for retirement. Section 1 examines panel data on earnings from the PSID. Using a bivariate normal model of random effects, we find that second-period-of-life earnings are strongly positively correlated with initial earnings but have a higher variance. Section 2 studies the consequences for life-cycle saving. Households know their youthful earning power as they enter the labor market, but only in midlife do they learn their actual second-period earning ability. For plausible calibrations, precautionary saving only adds 5-6% to aggregative life-cycle wealth accumulation. Nevertheless, we find that, given borrowing constraints on households' behavior, the variety of earning profiles that our bivariate normal model generates itself stimulates more than twice as much extra wealth accumulation as precautionary saving.

Precautionary Savings And Income Uncertainty

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Author : Keiko Murata
language : en
Publisher:
Release Date : 2003

Precautionary Savings And Income Uncertainty written by Keiko Murata and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2003 with Consumer behavior categories.

Lifetime Earnings Social Security Benefits And The Adequacy Of Retirement Wealth Accumulation

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Author : Eric M. Engen
language : en
Publisher:
Release Date : 2004

Lifetime Earnings Social Security Benefits And The Adequacy Of Retirement Wealth Accumulation written by Eric M. Engen and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2004 with categories.

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.

Disentangling The Importance Of The Precautionary Saving Motive

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Author : Arthur B. Kennickell
language : en
Publisher:
Release Date : 2004

Disentangling The Importance Of The Precautionary Saving Motive written by Arthur B. Kennickell and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2004 with Saving and investment categories.

We assess the importance of the precautionary saving motive by relying on a direct question about precautionary wealth from the 1995 and 1998 waves of the Survey of Consumer Finances. In this survey, a new question has been designed to elicit the amount of desired precautionary wealth. This allows us to bound the amount of precautionary accumulation and to overcome many of the problems of previous works on this topic. We find that a precautionary saving motive exists and affects virtually every type of household. Even though this motive does not give rise to large amounts of wealth for young and middle-age households, it is particularly important for two groups: older households and business owners. Overall, we provide strong evidence that we need to take the precautionary saving motive into account when modeling saving behavior.

Do The Retired Elderly In Europe Decumulate Their Wealth

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Author : Charles Yuji Horioka
language : en
Publisher:
Release Date : 2022

Do The Retired Elderly In Europe Decumulate Their Wealth written by Charles Yuji Horioka and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2022 with categories.

In this paper, we use micro data on a large number of European countries from the Survey of Health, Ageing and Retirement in Europe (SHARE) to examine the wealth accumulation (saving) behavior of the retired elderly in Europe. To summarize our main findings, we find that less than half of the retired elderly in Europe are decumulating their wealth and that the average wealth accumulation rate of the retired elderly in Europe is positive though relatively moderate (6.6% over a 3-year period). These findings strongly suggest that the Wealth Decumulation (or Retirement Saving) Puzzle (the tendency of the retired elderly to not decumulate their wealth or to decumulate their wealth more slowly than expected) applies in the case of Europe. Moreover, our regression results suggest that bequest motives, generous public pension systems, and the reluctance of retired elderly homeowners to sell or borrow against their owner-occupied housing are the primary explanations for the existence of the Wealth Decumulation Puzzle in Europe.

Preparing For An Aging World

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Author : National Research Council
language : en
Publisher: National Academies Press
Release Date : 2001-06-26

Preparing For An Aging World written by National Research Council and has been published by National Academies Press this book supported file pdf, txt, epub, kindle and other format this book has been release on 2001-06-26 with Social Science categories.

Aging is a process that encompasses virtually all aspects of life. Because the speed of population aging is accelerating, and because the data needed to study the aging process are complex and expensive to obtain, it is imperative that countries coordinate their research efforts to reap the most benefits from this important information. Preparing for an Aging World looks at the behavioral and socioeconomic aspects of aging, and focuses on work, retirement, and pensions; wealth and savings behavior; health and disability; intergenerational transfers; and concepts of well-being. It makes recommendations for a collection of new, cross-national data on aging populationsâ€"data that will allow nations to develop policies and programs for addressing the major shifts in population age structure now occurring. These efforts, if made internationally, would advance our understanding of the aging process around the world.

Saving And The Accumulation Of Wealth

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Author : Albert Ando
language : en
Publisher: Cambridge University Press
Release Date : 1994-03-25

Saving And The Accumulation Of Wealth written by Albert Ando and has been published by Cambridge University Press this book supported file pdf, txt, epub, kindle and other format this book has been release on 1994-03-25 with Business & Economics categories.

Taking Italy as their field of research, the contributors conduct a coherent analysis of households' saving behaviour.

What Determines Savings

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Author : Laurence J. Kotlikoff
language : en
Publisher: MIT Press (MA)
Release Date : 2003-02-01

What Determines Savings written by Laurence J. Kotlikoff and has been published by MIT Press (MA) this book supported file pdf, txt, epub, kindle and other format this book has been release on 2003-02-01 with Business & Economics categories.

This book examines a number of important determinants of wealth accumulation, including retirement bequests, and precautionary saving motives, demographics, the tax structure, social security, and insurance institutions.

Optimal Financial Knowledge And Wealth Inequality

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Author : Annamaria Lusardi
language : en
Publisher:
Release Date : 2013

Optimal Financial Knowledge And Wealth Inequality written by Annamaria Lusardi and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2013 with Economics categories.

While financial knowledge is strongly positively related to household wealth, there is also considerable cross-sectional variation in both financial knowledge and net asset levels. To explore these patterns, we develop a calibrated stochastic life cycle model featuring endogenous financial knowledge accumulation. The model generates substantial wealth inequality, over and above that of standard life cycle models; this is because higher earners typically have more hump-shaped labor income profiles and lower retirement benefits which, when interacted with precautionary saving motives, boost their need for private wealth accumulation and thus financial knowledge. Our simulations show that endogenous financial knowledge accumulation has the potential to account for a large proportion of wealth inequality. The fraction of the population which is rationally financially "ignorant" depends on the generosity of the retirement system and the level of means-tested benefits. Educational efforts to enhance financial savvy early in the life cycle so as to produce one percentage point excess return per year would be valued highly by people in all educational groups.