@inbook {12305, title = {Disability-free life trends at older ages: Implications for longevity risk management }, booktitle = {New Models for Managing Longevity Risk: Public-Private Partnerships}, year = {2022}, publisher = {Oxford University Press}, organization = {Oxford University Press}, chapter = {3}, keywords = {Activities of Daily Living, Disability}, isbn = {978{\textendash}0{\textendash}19{\textendash}285980{\textendash}8}, doi = {10.1093/oso/9780192859808.001.0001}, author = {Douglas A. Wolf and Olivia S. Mitchell} } @inbook {12306, title = {Does working longer enhance old age?}, booktitle = {New Models for Managing Longevity Risk: Public-Private Partnerships}, year = {2022}, publisher = {Oxford University Press}, organization = {Oxford University Press}, chapter = {4}, keywords = {health, Retirement, working}, isbn = {978{\textendash}0{\textendash}19{\textendash}285980{\textendash}8}, doi = {10.1093/oso/9780192859808.001.0001}, author = {Maria D Fitzpatrick and Olivia S. Mitchell} } @article {MITCHELL2022100371, title = {Income trajectories in later life: Longitudinal evidence from the Health and Retirement Study}, journal = {The Journal of the Economics of Ageing}, volume = {22}, year = {2022}, pages = {100371}, abstract = {We track low-income respondents in the longitudinal Health and Retirement Study for 23 years, to observe how their financial situations unfolded as they aged. We document that (a) real incomes remained relatively stable as individuals entered retirement and progressed through their later years; and (b) labor force participation declined and thus earnings became less important with age, while Social Security and retirement savings rose as a proportion of annual income. Low-income people near retirement also tended to fare poorly during retirement.}, keywords = {Aging, Financial literacy, Financial resilience, Vulnerable groups}, issn = {2212-828X}, doi = {10.1016/j.jeoa.2022.100371}, author = {Olivia S. Mitchell and Robert L. Clark and Annamaria Lusardi} } @inbook {12304, title = {Perceptions of Mortality: Individual assessment of longevity risk}, booktitle = {New Models for Managing Longevity Risk: Public-Private Partnerships}, year = {2022}, publisher = {Oxford University Press}, organization = {Oxford University Press}, chapter = {2}, keywords = {Life Expectancy, Mortality, Survival}, isbn = {978{\textendash}0{\textendash}19{\textendash}285980{\textendash}8}, doi = {10.1093/oso/9780192859808.001.0001}, author = {Kathleen McGarry and Olivia S. Mitchell} } @article {11663, title = {How Financial Literacy Shapes the Demand for Financial Advice at Older Ages}, journal = {The Journal of the Economics of Ageing}, volume = {20}, year = {2021}, pages = {100329}, abstract = {We investigate how financial literacy shapes older Americans{\textquoteright} demand for financial advice. Using an experimental module fielded in the Health and Retirement Study, we show that financial literacy strongly improves the quality but not the quantity of financial advice sought. In particular, more financially literate people seek financial help from professionals. This effect is more pronounced among older people and those with more wealth and more complex financial positions. Our analysis result implies that financial literacy and financial advisory services are complementary with, rather than substitutes for, each other.}, keywords = {financial advice, Financial literacy, Financial Management}, isbn = {2212-828X}, doi = {10.1016/j.jeoa.2021.100329Get}, author = {Kim, Hugh H. and Maurer, Raimond and Olivia S. Mitchell} } @article {maurer_mitchell_2020, title = {Older peoples{\textquoteright} willingness to delay social security claiming}, journal = {Journal of Pension Economics and Finance}, volume = {20}, year = {2021}, pages = {410 - 425}, type = {Journal}, abstract = {We have designed and implemented an experimental module in the 2014 Health and Retirement Study to measure older persons{\textquoteright} willingness to defer claiming of Social Security benefits. Under the current system{\textquoteright} status quo where delaying claiming boosts eventual benefits, we show that 46\% of the respondents would delay claiming and work longer. If respondents were instead offered an actuarially fair lump sum payment instead of higher lifelong benefits, about 56\% indicate they would delay claiming. Without a work requirement, the average amount needed to induce delayed claiming is only $60,400, while when part-time work is stipulated, the amount is slightly higher, $66,700. This small difference implies a low utility value of leisure foregone, of under 20\% of average household income.}, keywords = {Annuity, Labor Supply, lump sum, Retirement Age, Social Security}, doi = {10.1017/S1474747219000404}, author = {Maurer, Raimond and Olivia S. Mitchell} } @article {11588, title = {What Explains Low Old-Age Income? Evidence from the Health and Retirement Study}, number = {28721}, year = {2021}, institution = {National Bureau of Economic Research}, address = {Cambridge, MA}, abstract = {We examine respondents in the Health and Retirement Study (HRS) to observe how their financial situations unfolded as they aged. We focus on low income older adults and follow them over time to identify the factors associated with having low income at baseline and thereafter. We find that (a) real income remained relatively stable as individuals approach and enter retirement, and progress through their retirement years, and (b) labor force participation declined and thus earnings became less important with age, while Social Security and retirement savings rose as a proportion of annual income.}, keywords = {Income, retirement savings, Social Security}, doi = {10.3386/w28721}, author = {Olivia S. Mitchell and Clark, Robert L. and Annamaria Lusardi} } @article {10727, title = {Debt and Financial Vulnerability on the Verge of Retirement}, journal = {Journal of Money, Credit and Banking}, volume = {52}, year = {2020}, pages = {1005-1034}, type = {Journal}, abstract = {Abstract We analyze older individuals{\textquoteright} debt and financial vulnerability using data from the Health and Retirement Study (HRS) and the National Financial Capability Study (NFCS). In the HRS, we compare three groups of people age 56{\textendash}61 in 1992, 2004, and 2010, to assess cross-cohort changes in debt over time. Two waves of the NFCS (2012 and 2015) provide additional insights into debt management and older individuals{\textquoteright} capacity to shield themselves against shocks. We conclude that recent cohorts hold more debt and face more financial insecurity than in the past. This will render them particularly vulnerable to forecasted interest rate increases.}, keywords = {Personal finance, retirement plans}, issn = {00222879}, doi = {10.1111/jmcb.12671}, author = {Annamaria Lusardi and Olivia S. Mitchell and Oggero, Noemi} } @article { ISI:000535914600014, title = {Financial Fraud Among Older Americans: Evidence and Implications}, journal = {JOURNALS OF GERONTOLOGY SERIES B-PSYCHOLOGICAL SCIENCES AND SOCIAL SCIENCES}, volume = {75}, year = {2020}, pages = {861-868}, abstract = {Objectives: The consequences of poor financial capability at older ages are serious and include making mistakes with credit, spending retirement assets too quickly, and being defrauded by financial predators. Because older persons are at or past the peak of their wealth accumulation, they are often the targets of fraud. Methods: Our project analyzes a module we developed and fielded on people aged 50 an older years in the 2016 Health and Retirement Study (HRS). Using this data set, we evaluated the incidence and prospective risk factors (measured in 2010) for investment fraud and prize/lottery fraud using logistic regression (N = 1,220). Results: Relatively few HRS respondents mentioned any single form of fraud over the prior 5 years, but 5.0\% reported at least one form of investment fraud and 4.4\% recounted prize/lottery fraud. Greater wealth (nonhousing) was associated with investment fraud, whereas lower housing wealth and symptoms of depression were associated with prize/lottery fraud. Hispanics were significantly less likely to report either type of fraud. Other suspected risk factors-low social integration and financial literacy-were not significant. Discussion: Fraud is a complex phenomenon and no single factor uniquely predicts victimization across different types, even within the category of investment fraud. Prevention programs should educate consumers about various types of fraud and increase awareness among financial services professionals.}, keywords = {Financial literacy, Health and Retirement Study, Investment fraud, Lottery scam}, issn = {1079-5014}, doi = {10.1093/geronb/gby151}, author = {DeLiema, Marguerite and Deevy, Martha and Annamaria Lusardi and Olivia S. Mitchell} } @article {10166, title = {Narrow framing and long-term care insurance}, journal = {Journal of Risk and Insurance}, volume = {84}, year = {2020}, pages = {861-893}, type = {Journal}, abstract = {We propose a model of narrow framing in insurance and test it using data from a new module we designed and fielded in the Health and Retirement Study. We show that respondents subject to narrow framing are substantially less likely to buy long-term care insurance than average. This effect is much larger than the effects of risk aversion or adverse selection, and it offers a new explanation for why people underinsure their later-life care needs. }, keywords = {Finances, Long-term care insurance}, issn = {0022-4367}, doi = {10.1111/jori.12290}, author = {Gottlieb, Daniel and Olivia S. Mitchell} } @article {10730, title = {Understanding Debt in the Older Population}, number = {WP2020-04}, year = {2020}, institution = {University of Pennsylvania}, type = {Report}, address = {Philadelphia}, abstract = {Poor financial capability can have important consequences for well-being in later life. To explore aspects of financial management related to debt, we have designed and analyzed a new module in the 2018 Health and Retirement Study along with information from the 2018 National Financial Capability Study to evaluate the factors associated with debt and debt management in later life. We show that, even for older Americans, student loans and unpaid medical bills represent a large proportion of their debt, and having children also contributes to their indebtedness. By contrast, the more financially literate have more positive financial perceptions and behaviors. Specifically, being able to answer one additional financial literacy question correctly is associated with a higher probability (3-6 percentage points) of reporting an above average credit record and planning for retirement. Clearly, financial knowledge can help limit debt exposure at older ages.}, keywords = {Debt, financial fragility, Financial literacy, Mortgages, Retirement, student loans}, url = {https://repository.upenn.edu/prc_papers/575/}, author = {Annamaria Lusardi and Olivia S. Mitchell and Oggero, Noemi} } @article {10036, title = {How cognitive ability and financial literacy shape the demand for financial advice at older ages}, number = {NBER Working Paper No. 25750}, year = {2019}, month = {04/2019}, pages = {1-20}, institution = {National Bureau of Economic Research}, address = {Cambridge, MA}, abstract = {We investigate how cognitive ability and financial literacy shape older Americans{\textquoteright} demand for financial advice using an experimental module in the 2016 Health and Retirement Study. We show that cognitive ability and financial literacy strongly improve the quality, but not the quantity, of financial advice sought. Most importantly, the financially literate and more cognitively able tend to seek financial help from professionals rather than family members, and they are less likely to accept so-called {\textquoteleft}free{\textquoteright} financial advice that may entail conflicts of interest. Nevertheless, those with higher cognitive function also tend to distrust financial advisors, leading them to eschew their services.}, keywords = {Cognition \& Reasoning, Financial literacy, Social Support}, doi = {10.3386/w25750}, url = {http://www.nber.org/papers/w25750.pdf}, author = {Hugh Hoikwang Kim and Maurer, Raimond and Olivia S. Mitchell} } @article {9093, title = {Time discounting and economic decision-making in the older population}, journal = {The Journal of the Economics of Ageing}, volume = {14}, year = {2019}, abstract = {This paper examines heterogeneity in time discounting among a representative sample of elderly Americans, as well as its role in explaining key economic behaviors at older ages. We show how older Americans evaluate simple (hypothetical) inter-temporal choices in which payments today are compared with payments in the future. Using the indicators derived from this measure, we then demonstrate that differences in discounting patterns are associated with characteristics of particular importance in elderly populations. For example, cognitive deficits are associated with greater impatience, whereas bequest motives are associated with less impatience. We then relate our discounting measure to key economic outcomes and find that impatience is associated with lower wealth, fewer investments in health, and less planning for end of life care.}, keywords = {Decision making, Retirement Planning and Satisfaction, Self-control}, issn = {2212828X}, doi = {10.1016/j.jeoa.2017.05.001}, url = {http://www.sciencedirect.com/science/article/pii/S2212828X16300457}, author = {Huffman, David and Maurer, Raimond and Olivia S. Mitchell} } @article {9600, title = {The Changing Face of Debt and Financial Fragility at Older Ages}, journal = {AEA Papers and Proceedings}, volume = {108}, year = {2018}, month = {05/2018}, pages = {4077-411}, chapter = {407}, abstract = {We investigate changes in older individuals{\textquoteright} financial fragility as they stand on the verge of retirement. Using data from the Health and Retirement Study (HRS), we compare how debt has changed for successive cohorts of people age 56-61. Our analysis shows that recent older Americans close to retirement hold more debt, and hence face greater financial insecurity, than earlier generations. This is primarily due to having bought more expensive homes with smaller down payments. We discuss possible policy implications. }, keywords = {Debt, Finances, Financial security, Homeownership, Retirement Planning and Satisfaction}, issn = {2574-0768}, author = {Annamaria Lusardi and Olivia S. Mitchell and Oggero, Noemi} } @article {9493, title = {Exploring the Risks and Consequences of Elder Fraud Victimization: Evidence from the Health and Retirement Study}, number = {WP397}, year = {2018}, month = {12/2017}, institution = {Michigan Retirement Research Center, Institute for Social Research, University of Michigan}, address = {Ann Arbor, MI}, abstract = {This is the first study to use longitudinal data to explore both the antecedents and consequences of fraud victimization in the older population. Because older persons are close to or past the peak of their wealth accumulation, they are often the targets of fraud. This paper reports on analysis of the Leave Behind Questionnaires (LBQs) fielded on Health and Retirement Study (HRS) respondents over three survey waves in 2008, 2010, and 2012. We evaluate the demographic determinants and risk factors of reporting financial fraud victimization in the survey, and explore whether there are demographic subgroups of older victims. In addition, we examine the financial, physical and psychological consequences of fraud. Overall results suggest that there is no single reliable predictor of fraud victimization across all three LBQ samples. When LBQ responses were pooled across survey years, we found that younger, male, better-educated, and depressed persons reported being defrauded significantly more often. Victimization was associated with lower nonhousing wealth in the combined sample controlling for other factors, but had no measurable impact on cognitive, psychological, or physical health outcomes. Future research should examine predictors and outcomes based on the type of financial fraud experienced and the amount of money lost.}, keywords = {Crime, Elder fraud, Gender Differences, Risk Factors}, url = {http://mrrc.isr.umich.edu/wp374/}, author = {DeLiema, Marguerite and Deevy, Martha and Annamaria Lusardi and Olivia S. Mitchell} } @article {9791, title = {Financial Fraud among Older Americans: Evidence and Implications}, number = {NBER Working Paper No. 24803}, year = {2018}, institution = {National Bureau of Economic Research}, address = {Cambridge, MA}, abstract = {The consequences of poor financial capability at older ages are serious and include making mistakes with credit, spending retirement assets too quickly, and being defrauded by financial predators. Because older persons are at or past the peak of their wealth accumulation, they are often the targets of fraud. Our project analyzes a module we developed and fielded in the 2016 Health and Retirement Study (HRS). Using this dataset, we evaluate the incidence and risk factors for investment fraud, prize/lottery scams, and account misuse, using regression analysis. Relatively few HRS respondents mentioned any single form of fraud over the prior five years, but nearly 5\% reported at least one form of investment fraud, 4 \% recounted prize/lottery fraud, and 30\% indicated that others had used/attempted to use their accounts without permission. There were few risk factors consistently associated with such victimization in the older population. Fraud is a complex phenomenon and no single factor uniquely predicts victimization. The incidence of fraud could be reduced by educating consumers about various types of fraud and by increasing awareness among financial service professionals.}, keywords = {Finances, Fraud, Risk Factors}, doi = {10.3386/w24803}, url = {http://www.nber.org/papers/w24803.pdf}, author = {DeLiema, Marguerite and Deevy, Martha and Annamaria Lusardi and Olivia S. Mitchell} } @article {9787, title = {Innovations in Finance (A Special Report) - Experts{\textquoteright} Voices: Why Elder Financial Fraud Is Worse Than We Thought}, journal = {The Wall Street Journal}, year = {2018}, month = {06/20/2018}, pages = {R8}, edition = {Eastern}, address = {New York City}, author = {Olivia S. Mitchell} } @article {9836, title = {What the Health and Retirement Study Tells Us About Cognitive Ability, Financial Literacy, and the Demand for Financial Advice at Older Ages}, number = {No. 146}, year = {2018}, month = {07/2018}, institution = {TIAA Institute}, address = {New York City}, abstract = {Cognitive ability and financial literacy can have an indeterminate effect on older persons{\textquoteright} financial behavior. Older investors who recognize that their capacity to manage financial assets is diminished would rationally delegate the task to others. But those who mistakenly believe their acumen remained intact might continue managing their money themselves. This study examines the ambiguous influence of cognitive ability and financial literacy at older ages to gauge their impact on demand for, and use of, financial advice.}, keywords = {Cognitive Ability, Decision making, Financial literacy}, url = {https://www.tiaainstitute.org/publication/what-health-and-retirement-study-tells-us-about-cognitive-ability}, author = {Hugh Hoikwang Kim and Maurer, Raimond and Olivia S. Mitchell} } @article {9520, title = {Why Making Big Decisions as We Get Older Is So Risky}, journal = {Dow Jones Institutional News}, volume = {2018}, year = {2018}, publisher = {Dow Jones}, address = {New York City}, keywords = {Decision making, News, Op-ed, Risk Factors}, author = {Olivia S. Mitchell} } @article {9259, title = {Debt and Financial Vulnerability on the Verge of Retirement}, number = {Working Paper No. 23664}, year = {2017}, institution = {National Bureau of Economic Research}, address = {Cambridge, MA}, abstract = {We analyze older individuals{\textquoteright} debt and financial vulnerability using data from the Health and Retirement Study (HRS) and the National Financial Capability Study (NFCS). Specifically, in the HRS we examine three different cohorts (individuals age 56-61) in 1992, 2004, and 2010 to evaluate cross-cohort changes in debt over time. We also use two waves of the NFCS (2012 and 2015) to gain additional insights into debt management and older individuals{\textquoteright} capacity to shield themselves against shocks. We show that recent cohorts have taken on more debt and face more financial insecurity, mostly due to having purchased more expensive homes with smaller down payments.}, keywords = {Consumption and Savings, Debt, Retirement Planning and Satisfaction}, doi = {10.3386/w23664}, url = {http://www.nber.org/papers/w23664.pdf}, author = {Annamaria Lusardi and Olivia S. Mitchell and Oggero, Noemi} } @article {9392, title = {A Financial Literacy Test That Works}, journal = {Forbes}, year = {2017}, publisher = {Forbes}, address = {New York City, NY}, keywords = {Big Three, Financial literacy, Survey Methodology}, url = {https://www.forbes.com/sites/pensionresearchcouncil/2017/12/14/a-financial-literacy-test-that-works/$\#$50783139641f}, author = {Olivia S. Mitchell} } @article {9204, title = {Incentivizing older people to delay social security claiming}, number = {57}, year = {2017}, institution = {SAFE}, address = {Frankfurt, Germany}, abstract = {Given rising life expectations around the world, it seems that old-age pension benefits will need to be cut and pension contributions boosted in many nations. Yet our research on old-age system reforms does not require raising mandatory retirement ages or contributions. Instead, we offer ways to enhance incentives for people to work longer and delay retirement. There are good reasons to incentivize older people to work longer and delay retirement. These include rising longevity, the shrinking workforce, and emerging evidence indicating that working longer can be associated with better mental and physical health for many people. Nevertheless, old age Social Security systems in many nations find that people tend to claim benefits early, usually leading to reduced benefits.In the United States, for instance, a majority of Americans claim their Social Security benefits at the earlier feasible age, namely 62, even though their monthly benefits would be 75\% higher if they waited until age 70. To test whether this is the result of people underweighting the economic value of higher lifetime benefit streams, we examine whether people would claim later and work longer if they were rewarded with a lump sum instead of a higher lifetime benefit stream for deferring. Two arguments have been offered to explain early claiming. One is that workers claim early to avoid potentially {\textquotedblleft}forfeiting{\textquotedblright} their deferred benefits should they die too soon (Brown et al., 2016). A second explanation is that many people underweight the economic value of lifetime benefit streams (Brown et al., 2017). This latter rationale motivates the present study.}, keywords = {Retirement Planning and Satisfaction, Social Security}, url = {http://publikationen.ub.uni-frankfurt.de/frontdoor/index/index/docId/44313}, author = {Maurer, Raimond and Olivia S. Mitchell} } @article {9165, title = {Optimal financial knowledge and wealth inequality}, journal = {The Journal of Political Economy}, volume = {125}, year = {2017}, pages = {431-477}, abstract = {We show that financial knowledge is a key determinant of wealth inequality in a stochastic lifecycle model with endogenous financial knowledge accumulation, where financial knowledge enables individuals to better allocate lifetime resources in a world of uncertainty and imperfect insurance. Moreover, because of how the U.S. social insurance system works, better-educated individuals have most to gain from investing in financial knowledge. Our parsimonious specification generates substantial wealth inequality relative to a one-asset saving model and one where returns on wealth depend on portfolio composition alone. We estimate that 30-40 percent of retirement wealth inequality is accounted for by financial knowledge.}, keywords = {Financial literacy, Retirement Planning and Satisfaction, Wealth}, issn = {0022-3808}, doi = {10.1086/690950}, author = {Annamaria Lusardi and Pierre-Carl Michaud and Olivia S. Mitchell} } @inbook {5263, title = {Are Retirees Falling Short? Reconciling the Conflicting Evidence}, booktitle = {Reimagining Pensions: The Next 40 Years}, year = {2016}, pages = {11-36}, publisher = {Oxford University Press}, organization = {Oxford University Press}, address = {Oxford, United Kingdom}, abstract = {This paper examines conflicting assessments of whether people will have adequate retirement income to maintain their pre-retirement standard of living. The studies that it examines use data from the Survey of Consumer Finances (SCF), the Health and Retirement Study (HRS), and the HRS supplement Consumption and Activities Mail Survey (CAMS). Critical components of the analysis are behavioral assumptions about household consumption patterns when children leave home and when households retire. A key limitation is that the behavioral assumptions in the different studies are based on incomplete knowledge of actual household behavior.}, keywords = {Net Worth and Assets, Retirement Planning and Satisfaction}, author = {Alicia H. Munnell and Matthew S. Rutledge and Anthony Webb}, editor = {Olivia S. Mitchell and Shea, Richard C.} } @article {8938, title = {Framing and Claiming: How Information-Framing Affects Expected Social Security Claiming Behavior}, journal = {Journal of Risk and Insurance}, volume = {83}, year = {2016}, month = {Jan-01-2016}, pages = {139 - 162}, abstract = {This article provides evidence that Social Security benefit claiming decisions are strongly affected by framing and are thus inconsistent with expected utility theory. Using a randomized experiment that controls for both observable and unobservable differences across individuals, we find that the use of a {\textquotedblleft}breakeven analysis{\textquotedblright} encourages early claiming. Respondents are more likely to delay when later claiming is framed as a gain, and the claiming age is anchored at older ages. Additionally, the financially less literate, individuals with credit card debt, and those with lower earnings are more influenced by framing than others.}, doi = {10.1111/jori.v83.110.1111/j.1539-6975.2013.12004.x}, url = {http://doi.wiley.com/10.1111/jori.v83.1http://doi.wiley.com/10.1111/j.1539-6975.2013.12004.xhttps://api.wiley.com/onlinelibrary/tdm/v1/articles/10.1111\%2Fj.1539-6975.2013.12004.x}, author = {Brown, Jeffrey R. and Arie Kapteyn and Olivia S. Mitchell} } @article {8561, title = {How Family Status and Social Security Claiming Options Shape Optimal Life Cycle Portfolios}, journal = {Review of Financial Studies}, volume = {29}, year = {2016}, month = {Jul-04-2016}, pages = {937 - 978}, abstract = {We show how optimal household decisions regarding work, retirement, saving, portfolio allocations, and life insurance are shaped by the complex financial options embedded in U.S. Social Security rules and uncertain family transitions. Our life cycle model predicts sharp consumption drops on retirement, an age-62 peak in claiming rates, and earlier claiming by wives versus husbands and single women. Moreover, life insurance is mainly purchased on men{\textquoteright}s lives. Our model, which takes Social Security rules seriously, generates wealth and retirement outcomes that are more consistent with the data, in contrast to earlier and less realistic models}, keywords = {Gender Differences, Older Adults, Retirement Planning and Satisfaction, Social Security}, issn = {0893-9454}, doi = {10.1093/rfs/hhv070}, url = {http://rfs.oxfordjournals.org/lookup/doi/10.1093/rfs/hhv070}, author = {Hubener, Andreas and Maurer, Raimond and Olivia S. Mitchell} } @article {8833, title = {Older Peoples{\textquoteright} Willingness to Delay Social Security Claiming}, number = {Working Paper No. 22942}, year = {2016}, month = {12/2016}, pages = {1-27}, institution = {National Bureau of Economic Research}, address = {Cambridge, MA}, abstract = {We have designed and fielded an experimental module in the 2014 HRS which seeks to measure older persons{\textquoteright} willingness to voluntarily defer claiming of Social Security benefits. In addition, we evaluate the stated willingness of older individuals to work longer, depending on the Social Security incentives offered to delay claiming their benefits. Our project extends previous work by analyzing the results from our HRS module and comparing findings from other data sources which included very much smaller samples of older persons. We show that half of the respondents would delay claiming if no work requirement were in place under the status quo, and only slightly fewer, 46\%, with a work requirement. We also asked respondents how large a lump sum they would need with or without a work requirement. In the former case, the average amount needed to induce delayed claiming was about $60,400, while when part-time work was required, the average was $66,700. This implies a low utility value of leisure foregone of only $6,300, or under 20\% of average household income.}, keywords = {Employment and Labor Force, Health Shocks, Older Adults, Retirement Planning and Satisfaction, Social Security}, doi = {10.3386/w22942}, url = {http://www.nber.org/papers/w22942.pdf}, author = {Maurer, Raimond and Olivia S. Mitchell} } @article {8888, title = {Older Women{\textquoteright}s Labor Market Attachment, Retirement Planning, and Household Debt}, number = {Working Paper No. 22606}, year = {2016}, month = {09/2016}, pages = {1-38}, institution = {National Bureau of Economic Research}, address = {Cambridge, MA}, abstract = {The goal of this paper is to ascertain whether older women{\textquoteright}s current and anticipated future labor force patterns have changed over time, and if so, to evaluate the factors associated with longer work lives and plans to continue work at older ages. Using data from both the Health and Retirement Study (HRS) and the National Financial Capability Study (NFCS), we show that older women{\textquoteright}s current and intended future labor force attachment patterns are changing over time. Specifically, compared to our 1992 HRS baseline, more recent cohorts of women in their 50{\textquoteright}s and 60s{\textquoteright}s are more likely to plan to work longer. When we explore the reasons for delayed retirement among older women, factors include education, more marital disruption, and fewer children than prior cohorts. But household finances also play a key role, in that older women today have more debt than previously and are more financially fragile than in the past. The NFCS data show that factors associated with retirement planning include having more education and greater financial literacy. Those who report excessive amounts of debt and are financially fragile are the least financially literate, had more dependent children, and experienced income shocks. Thus shocks do play a role in older women{\textquoteright}s debt status, but it is not enough to have resources: people also need the capacity to manage those resources if they are to stay out of debt as they head into retirement.}, keywords = {Older Adults, Retirement Planning and Satisfaction, Women and Minorities}, doi = {10.3386/w22606}, url = {http://www.nber.org/papers/w22606.pdf}, author = {Annamaria Lusardi and Olivia S. Mitchell} } @article {9745, title = {Public and Private Challenges of an Aging U.S. Population}, journal = {Business Economics}, volume = {51}, year = {2016}, month = {Jan-01-2016}, pages = {8 - 10}, abstract = {The challenges posed by the aging of the US population for business and public policy are vast. They are amplified particularly by: * Slow increase of incomes - and therefore low private savings - for those at the bottom of the pay distribution. * Cutbacks in employee health-care insurance and defined benefit pension plans. * Unsustainability of Social Security and Medicare as currently configured. This paper spells out these challenges and discusses how they can be addressed. Of particular importance are some combination of enhanced revenue and reduced expenditure for Social Security and Medicare, the shift of private pension plans from defined benefit to defined contribution, the need to consider later retirement ages, and the need for improved personal financial literacy.}, keywords = {Income, Income inequality, Savings, Social Security, Spending, Taxes}, issn = {0007-666X}, doi = {10.1057/be.2016.6}, url = {http://dx.doi.org/10.1057/be.2016.6}, author = {Olivia S. Mitchell} } @article {8842, title = {Time discounting and economic decision-making among the elderly}, number = {Working Paper No. 22438}, year = {2016}, month = {07/2016}, pages = {1-40}, institution = {National Bureau of Economic Research}, address = {Cambridge, MA}, abstract = {This paper evaluates the extent of heterogeneity in time discounting among elderly Americans, as well as its role in explaining older peoples{\textquoteright} key behaviors. We first show how older Americans evaluate simple (hypothetical) intertemporal choices in which payments now are compared with payments in the future. This adds to the literature on time horizon experiments by focusing on a nationally representative sample of persons age 70+. Using the indicators derived from this experiment, we show how differences in discounting patterns are associated with characteristics of particular importance in elderly populations, such as serious health and mental conditions. We then relate our discounting measure to key outcome variables including wealth, the timing of retirement, investments in health, and decisions about end of life care.}, keywords = {Decision making, Health Conditions and Status, Older Adults}, doi = {10.3386/w22438}, url = {http://www.nber.org/papers/w22438.pdf}, author = {Huffman, David and Maurer, Raimond and Olivia S. Mitchell} } @article {8601, title = {Why Boomer Women Are Worse Off Financially Than Their Predecessors}, journal = {The Wall Street Journal}, year = {2016}, month = {09/12/2016}, keywords = {Financial literacy, Older Adults, Wealth management, Women and Minorities}, url = {http://blogs.wsj.com/experts/2016/09/11/why-boomer-women-are-worse-off-financially-than-their-predecessors/}, author = {Olivia S. Mitchell} } @article {8296, title = {Disaggregating activities of daily living limitations for predicting nursing home admission.}, journal = {Health Serv Res}, volume = {50}, year = {2015}, note = {Times Cited: 0 0}, month = {2015 Apr}, pages = {560-78}, publisher = {50}, abstract = {

OBJECTIVE: To examine whether disaggregated activities of daily living (ADL) limitations better predict the risk of nursing home admission compared to conventionally used ADL disability counts.

DATA SOURCES: We used panel data from the Health and Retirement Study (HRS) for years 1998-2010. The HRS is a nationally representative survey of adults older than 50 years (n = 18,801).

STUDY DESIGN: We fitted Cox regressions in a continuous time survival model with age at first nursing home admission as the outcome. Time-varying ADL disability types were the key explanatory variables.

PRINCIPAL FINDINGS: Of the six ADL limitations, bathing difficulty emerged as the strongest predictor of subsequent nursing home placement across cohorts. Eating and dressing limitations were also influential in driving admissions among more recent cohorts. Using simple ADL counts for analysis yielded similar adjusted R(2) s; however, the amount of explained variance doubled when we allowed the ADL disability measures to time-vary rather than remain static.

CONCLUSIONS: Looking beyond simple ADL counts can provide health professionals insights into which specific disability types trigger long-term nursing home use. Functional disabilities measured closer in time carry more prognostic power than static measures.

}, keywords = {Activities of Daily Living, Age Factors, Aged, Aged, 80 and over, Female, Geriatric Assessment, Homes for the Aged, Humans, Male, Middle Aged, Nursing homes, Patient Admission, Residence Characteristics, Risk Factors, Sex Factors, Socioeconomic factors}, issn = {1475-6773}, doi = {10.1111/1475-6773.12235}, author = {Joelle H Fong and Olivia S. Mitchell and Benedict S K Koh} } @article {8560, title = {Financial Literacy and Economic Outcomes: Evidence and Policy Implications.}, journal = {J Retire}, volume = {3}, year = {2015}, month = {2015 Summer}, pages = {107-114}, abstract = {

This paper reviews what we have learned over the past decade about financial literacy and its relationship to financial decision-making around the world. Using three questions, we have surveyed people in several countries to determine whether they have the fundamental knowledge of economics and finance needed to function as effective decision-makers. We find that levels of financial literacy are low not only in the United States. but also in many other countries including those with well-developed financial markets. Moreover, financial illiteracy is particularly acute for some demographic groups, especially women and the less-educated. These findings are important since financial literacy is linked to borrowing, saving, and spending patterns. We also offer new evidence on financial literacy among high school students drawing on the 2012 Programme for International Student Assessment implemented in 18 countries. Last, we discuss the implications of this research for policy.

}, issn = {2326-6899}, doi = {10.3905/jor.2015.3.1.107}, url = {http://www.iijournals.com/doi/10.3905/jor.2015.3.1.107}, author = {Olivia S. Mitchell and Annamaria Lusardi} } @article {5893, title = {Narrow Framing and Long-Term Care Insurance}, year = {2015}, institution = {Cambridge, MA, National Bureau of Economic Research}, abstract = {We propose a model of narrow framing in insurance and test it using data from a new module we designed and fielded in the Health and Retirement Study. We show that respondents subject to narrow framing are substantially less likely to buy long-term care insurance than average. This effect is distinct from, and much larger than, the effects of risk aversion or adverse selection, and it offers a new explanation for why people underinsure their later-life care needs.}, keywords = {Employment and Labor Force, Medicare/Medicaid/Health Insurance, Net Worth and Assets, Risk Taking}, author = {Gottlieb, Daniel and Olivia S. Mitchell} } @article {8559, title = {The Economic Importance of Financial Literacy: Theory and Evidence {\textdagger}}, journal = {Journal of Economic Literature}, volume = {52}, year = {2014}, month = {Jan-03-2014}, pages = {5 - 44}, abstract = {This paper undertakes an assessment of a rapidly growing body of economic research on financial literacy. We start with an overview of theoretical research, which casts financial knowledge as a form of investment in human capital. Endogenizing financial knowledge has important implications for welfare, as well as policies intended to enhance levels of financial knowledge in the larger population. Next, we draw on recent surveys to establish how much (or how little) people know and identify the least financially savvy population subgroups. This is followed by an examination of the impact of financial literacy on economic decision making in the United States and elsewhere. While the literature is still young, conclusions may be drawn about the effects and consequences of financial illiteracy and what works to remedy these gaps. A final section offers thoughts on what remains to be learned if researchers are to better inform theoretical and empirical models as well as public policy.}, keywords = {Decision making, Financial literacy, Older Adults, Welfare}, issn = {0022-0515}, doi = {10.1257/jel.52.1.5}, url = {http://pubs.aeaweb.org/doi/abs/10.1257/jel.52.1.5}, author = {Annamaria Lusardi and Olivia S. Mitchell} } @article {7970, title = {Financial literacy and financial sophistication in the older population}, journal = {Journal of Pension Economics and Finance}, volume = {13}, year = {2014}, note = {Export Date: 21 April 2014 Source: Scopus Article in Press}, pages = {347-366}, publisher = {13}, abstract = {Using a special-purpose module implemented in the Health and Retirement Study, we evaluate financial sophistication in the American population over the age of 50. We combine several financial literacy questions into an overall index to highlight which questions best capture financial sophistication and examine the sensitivity of financial literacy responses to framing effects. Results show that many older respondents are not financially sophisticated: they fail to grasp essential aspects of risk diversification, asset valuation, portfolio choice, and investment fees. Subgroups with notable deficits include women, the least educated, non-Whites, and those age 75 . In view of the fact that retirees increasingly must take on responsibility for their own retirement security, such meager levels of knowledge have potentially serious and negative implications.}, keywords = {Demographics, Net Worth and Assets, Other, Retirement Planning and Satisfaction}, doi = {10.1017/S1474747214000031}, author = {Annamaria Lusardi and Olivia S. Mitchell and Vilsa Curto} } @article {8129, title = {How does retiree health insurance influence public sector employee saving?}, journal = {Journal of health economics}, volume = {38}, year = {2014}, note = {Times Cited: 0 0}, pages = {109-18}, publisher = {38}, abstract = {Economic theory predicts that employer-provided retiree health insurance (RHI) benefits have a crowd-out effect on household wealth accumulation, not dissimilar to the effects reported elsewhere for employer pensions, Social Security, and Medicare. Nevertheless, we are unaware of any similar research on the impacts of retiree health insurance per se. Accordingly, the present paper utilizes a unique data file on respondents to the Health and Retirement Study, to explore how employer-provided retiree health insurance may influence net household wealth among public sector employees, where retiree healthcare benefits are still quite prevalent. Key findings include the following:}, keywords = {Demographics, Pensions, Public Policy, Retirement Planning and Satisfaction}, doi = {10.1016/j.jhealeco.2014.03.014}, author = {Robert Clark and Olivia S. Mitchell} } @article {5978, title = {How Does Retiree Health Insurance Influence Public Sector Employee Saving?}, year = {2013}, institution = {Cambridge, MA, National Bureau of Economic Research}, abstract = {Economic theory predicts that employer-provided retiree health insurance benefits crowd-out household wealth accumulation. Nevertheless, there is little research on the impacts of retiree health insurance on wealth accruals, so this paper utilizes a unique data file on three baseline cohorts from the Health and Retirement Study to explore how employer-provided retiree health insurance may influence net household wealth among public sector employees, where retiree healthcare benefits are still quite prevalent. We find that most full-time public sector employees who anticipate receiving employer-provided health insurance coverage in retirement save less than their private sector uncovered counterparts.}, keywords = {Insurance, Net Worth and Assets, Public Policy, Retirement Planning and Satisfaction}, author = {Robert Clark and Olivia S. Mitchell} } @book {8650, title = {The Market for Financial Advice}, series = {Pension Research Council Series}, year = {2013}, pages = {368}, publisher = {Oxford University Press}, organization = {Oxford University Press}, address = {Oxford, UK}, keywords = {Economics, Financial literacy, Market analyses, Older Adults, Retirement Planning and Satisfaction}, author = {Olivia S. Mitchell and Smetters, Kent} } @article {5970, title = {Older Adult Debt and Financial Frailty}, year = {2013}, institution = {Ann Arbor, The University of Michigan}, abstract = {Of particular interest in the present economic environment is whether access to credit is changing peoples indebtedness over time, particularly as they approach retirement. This project analyzes older individuals debt, debt management practices, and financial fragility using data from the Health and Retirement Study (HRS) and the National Financial Capability Study (NFCS). Specifically, we examine three different cohorts (individuals age 56 61) in different time periods, 1992, 2002 and 2008, in the HRS to evaluate cross-cohort changes in debt over time. We also draw on recent data from the National Financial Capability Study (NFCS) which provides detailed information on how families manage their debt. Our goal is to assess how wealth and debt among older persons has evolved over time, along with the potential consequences for retirement security. We find that more recent cohorts have taken on more debt and face more financial insecurity, mostly due to having purchased more expensive homes with smaller down payments. In addition, Baby Boomers are more likely to have engaged in expensive borrowing practices. Factors associated with better debt outcomes include having higher income, more education, and greater financial literacy; those associated with financial fragility include having more children and experiencing unexpected large income declines. Thus, shocks do play a role in the accumulation of debt close to retirement. But it is not enough to have resources, people also need the capacity to manage those resources if they are to stay out of debt as they head into retirement.}, keywords = {Net Worth and Assets, Retirement Planning and Satisfaction}, url = {http://www.mrrc.isr.umich.edu/dl.cfm?pid=946andtype=102}, author = {Annamaria Lusardi and Olivia S. Mitchell} } @article {8642, title = {Optimal Financial Knowledge and Wealth Inequality}, number = {18669}, year = {2013}, pages = {1-49}, institution = {National Bureau of Economic Research}, address = {Cambridge, MA}, abstract = {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.}, keywords = {Financial literacy, Older Adults, Wealth Inequality, Women and Minorities}, doi = {10.3386/w18669}, url = {http://www.nber.org/papers/w18669.pdf}, author = {Annamaria Lusardi and Pierre-Carl Michaud and Olivia S. Mitchell} } @article {9880, title = {Financial Sophistication in the Older Population}, number = {17863}, year = {2012}, institution = {National Bureau of Economic Research}, address = {Cambridge, MA}, abstract = {This paper examines data on financial sophistication among the U.S. older population, using a special-purpose module implemented in the Health and Retirement Study. We show that financial sophistication is deficient for older respondents (aged 55+). Specifically, many in this group lack a basic grasp of asset pricing, risk diversification, portfolio choice, and investment fees. Subpopulations with particular deficits include women, the least educated, persons over the age of 75, and non-Whites. In view of the fact that people are increasingly being asked to take on responsibility for their own retirement security, such lack of knowledge can have serious implications.}, keywords = {Financial literacy, Retirement Planning and Satisfaction}, doi = {10.3386/w17863}, author = {Annamaria Lusardi and Olivia S. Mitchell and Vilsa Curto} } @article {5926, title = {Financial Sophistication in the Older Population}, number = {17863}, year = {2012}, institution = {National Bureau of Economic Research }, address = {Cambridge, MA}, abstract = {This paper examines data on financial sophistication among the U.S. older population, using a special-purpose module implemented in the Health and Retirement Study. We show that financial sophistication is deficient for older respondents (aged 55 ). Specifically, many in this group lack a basic grasp of asset pricing, risk diversification, portfolio choice, and investment fees. Subpopulations with particular deficits include women, the least educated, persons over the age of 75, and non-Whites. In view of the fact that people are increasingly being asked to take on responsibility for their own retirement security, such lack of knowledge can have serious implications.}, keywords = {Consumption and Savings, Employment and Labor Force, Event History/Life Cycle, Net Worth and Assets, Other, Public Policy, Women and Minorities}, doi = {10.3386/w17863}, author = {Annamaria Lusardi and Olivia S. Mitchell and Vilsa Curto} } @article {8637, title = {Functional Disabilities and Nursing Home Admittance}, number = {WP 2012-19}, year = {2012}, institution = {Pension Research Council, University of Pennsylvania}, address = {Philadelphia, PA}, abstract = {This paper examines how inability to perform activities of daily living relates to the risk of nursing home admission over older adults{\textquoteright} life courses. Using longitudinal data on persons over age 50 from the Health and Retirement Study, we show that aging one year boosts the probability of having two or more disabilities by 9 to 12 percent in a multivariate logistic model. Moreover, at least three-fifths of all 65-year-old men and three-quarters of women will experience disability levels during their remaining lifetimes severe enough to trigger nursing home admission. Our analysis also suggests that certain types of disability are more important than others in predicting nursing home admittance and use, which has implications for the design and benefits triggers for long-term care insurance programs.}, keywords = {Disabilities, Hospitalization, Long-term Care, Mortality, Older Adults}, doi = {10.2139/ssrn.2157548}, author = {Joelle H Fong and Benedict S K Koh and Olivia S. Mitchell} } @inbook {8641, title = {The Outlook for Financial Literacy}, booktitle = {Financial Literacy: Implications for Retirement Security and the Financial Marketplace}, year = {2012}, publisher = {Oxford University Press}, organization = {Oxford University Press}, chapter = {1}, address = {Oxford, UK}, keywords = {Financial literacy, Forecasting, Future, Older Adults}, author = {Annamaria Lusardi and Olivia S. Mitchell} } @article {10624, title = {Retirement in Japan and the United States: Cross-national Comparisons using the Japanese Study of Aging and Retirement (JSTAR) and the U.S. Health and Retirement Study (HRS)}, number = {WP 2012-270}, year = {2012}, institution = {Michigan Retirement and Disability Research Center}, type = {Report}, address = {Ann Arbor}, abstract = {Cross-national comparisons of data from developed countries offer useful insights into the retirement process and policy. Here we summarize findings for older persons age 50-70 using new microdata files collected by the Japanese Study of Aging and Retirement (JSTAR) project, and we compare these with results in the U.S. Health and Retirement Study (HRS). We examine the relative importance of health, wealth, family, and other factors in work and retirement at older ages cross-nationally. Though both countries have relatively high employment at older ages, the Japanese have longer life expectancy, higher levels of financial wealth, and a lower public pension eligibility age. Our analysis, the first to compare these two rich data sources, suggests two conclusions (subject to revision when data weights become available). First, older Americans differ in key ways from their Japanese counterparts, particularly along educational, health, and wealth dimensions. Second, in some cases, there is a distinctly different impact of these factors on labor force outcomes. Specifically, age, sex, education, and wealth influence behavior differently across the two countries, though being obese or having better mental acuity/financial literacy scores has no differential impact. Thus observed differences in work patterns between Americans and Japanese at older ages are attributable to some identifiable factors; moreover, the results can be used to project future responses to changes in education, age, health, and wealth in order to account for the large differences in older workers{\textquoteright} work patterns at older ages in Japan and the US.}, keywords = {Cross-National, JSTAR, Retirement}, url = {https://mrdrc.isr.umich.edu/pubs/retirement-in-japan-and-the-united-states-cross-national-comparisons-using-the-japanese-study-of-aging-and-retirement-jstar-and-the-u-s-health-and-retirement-study-hrs-2/}, author = {Olivia S. Mitchell and John W R Phillips} } @article {8557, title = {Financial literacy and retirement planning in the United States}, journal = {Journal of Pension Economics and Finance}, volume = {10}, year = {2011}, pages = {509 - 525}, abstract = {We examine financial literacy in the US using the new National Financial Capability Study, wherein we demonstrate that financial literacy is particularly low among the young, women, and the less-educated. Moreover, Hispanics and African-Americans score the least well on financial literacy concepts. Interestingly, all groups rate themselves as rather well-informed about financial matters, notwithstanding their actual performance on the key literacy questions. Finally, we show that people who score higher on the financial literacy questions are much more likely to plan for retirement, which is likely to leave them better positioned for old age. Our results will inform those seeking to target financial literacy programmes to those in most need.}, keywords = {Education, Financial literacy, Older Adults, Retirement Planning and Satisfaction}, issn = {1474-7472}, doi = {10.1017/S1474747211000448}, author = {Annamaria Lusardi and Olivia S. Mitchell} } @article {8558, title = {FINANCIAL LITERACY AROUND THE WORLD: AN OVERVIEW.}, journal = {J Pension Econ Financ}, volume = {10}, year = {2011}, month = {2011 Oct}, pages = {497-508}, abstract = {

In an increasingly risky and globalized marketplace, people must be able to make well-informed financial decisions. Yet new international research demonstrates that financial illiteracy is widespread when financial markets are well developed as in Germany, the Netherlands, Sweden, Japan, Italy, New Zealand, and the United States, or when they are changing rapidly as in Russia. Further, across these countries, we show that the older population believes itself well informed, even though it is actually less well informed than average. Other common patterns are also evident: women are less financially literate than men and are aware of this shortfall. More educated people are more informed, yet education is far from a perfect proxy for literacy. There are also ethnic/racial and regional differences: city-dwellers in Russia are better informed than their rural counterparts, while in the U.S., African Americans and Hispanics are relatively less financially literate than others. Moreover, the more financially knowledgeable are also those most likely to plan for retirement. In fact, answering one additional financial question correctly is associated with a 3-4 percentage point higher chance of planning for retirement in countries as diverse as Germany, the U.S., Japan, and Sweden; in the Netherlands, it boosts planning by 10 percentage points. Finally, using instrumental variables, we show that these estimates probably underestimate the effects of financial literacy on retirement planning. In sum, around the world, financial literacy is critical to retirement security.

}, issn = {1474-7472}, doi = {10.1017/S1474747211000448}, url = {http://www.journals.cambridge.org/abstract_S1474747211000448}, author = {Annamaria Lusardi and Olivia S. Mitchell} } @book {8649, title = {Financial Literacy: Implications for Retirement Security and the Financial Marketplace}, series = {Pension Research Council Series}, year = {2011}, publisher = {Oxford University Press}, organization = {Oxford University Press}, address = {Oxford, UK}, abstract = {As financial markets grow ever more complex and integrated, households must make increasingly sophisticated and all-too-often irreversible economic decisions. This is particularly evident in retirement decision-making. Traditional defined benefit pension schemes are being replaced with defined contribution pensions; employer and government judgment regarding how much to save and where to invest has been replaced by employees having to make these choices on their own (sometimes assisted by advisers); and retirees have become responsible for managing their own pension assets. This volume explores how financial literacy can enhance peoples{\textquoteright} ability to make informed economic choices. It proposes that financial literacy determines how well people make and execute saving, investing, borrowing, and planning decisions. It examines causality using controlled settings to disentangle whether financial literacy causes saving or vice versa, and demonstrates that financial education programs do indeed enhance financial decision-making and asset accumulation.}, keywords = {Economics, Financial literacy, Older Adults, Retirement Planning and Satisfaction}, isbn = {0-19-969681-9}, url = {https://pensionresearchcouncil.wharton.upenn.edu/publications/books/financial-literacy-implications-for-retirement-security-and-the-financial-marketplace/}, author = {Olivia S. Mitchell and Annamaria Lusardi} } @article {5795, title = {Financial Literacy, Schooling, and Wealth Accumulation}, number = {WPS 10-06}, year = {2010}, institution = {Pension Research Council, University of Pennsylvania}, address = {Philadelphia, PA}, abstract = {Financial literacy and schooling attainment have been linked to household wealth accumulation. Yet prior findings may be biased due to noisy measures of financial literacy and schooling, as well as unobserved factors such as ability, intelligence, and motivation that could enhance financial literacy and schooling but also directly affect wealth accumulation. Here we use a new household dataset and an instrumental variables approach to isolate the causal effects of financial literacy and schooling on wealth accumulation. While financial literacy and schooling attainment are both strongly positively associated with wealth outcomes in linear regression models, our approach reveals even stronger and larger effects of financial literacy on wealth. It also indicates no significant positive effects of schooling attainment conditional on financial literacy in a linear specification, but positive effects when interacted with financial literacy. Estimated impacts are substantial enough to suggest that investments in financial literacy could have large positive payoffs.}, keywords = {Educational attainment, Financial literacy, household wealth}, url = {https://repository.upenn.edu/cgi/viewcontent.cgi?article=1031\&context=parc_working_papers}, author = {Behrman, Jere R. and Olivia S. Mitchell and Soo, Cindy and Bravo, David and The Wharton School} } @inbook {8646, title = {Human Capital Risk and Pension Outcomes}, booktitle = {Evaluating the Financial Performance of Pension Funds}, year = {2010}, pages = {119-151}, publisher = {World Bank}, organization = {World Bank}, address = {Washington, DC}, keywords = {Older Adults, Pensions, Retirement Planning and Satisfaction, Risk Factors}, author = {Olivia S. Mitchell and John A. Turner} } @article {5751, title = {Financial Literacy and Financial Sophistication Among Older Americans}, number = {15469}, year = {2009}, institution = { The National Bureau of Economic Research}, address = {Cambridge, MA}, abstract = {This paper analyzes new data on financial literacy and financial sophistication from the 2008 Health and Retirement Study. We show that financial literacy is lacking among older individuals and for the first time explore additional questions on financial sophistication which proves even scarcer. For this sample of older respondents over the age of 55, we find that people lack even a rudimentary understanding of stock and bond prices, risk diversification, portfolio choice, and investment fees. In view of the fact that individuals are increasingly required to take on responsibility for their own retirement security, this lack of knowledge has serious implications.}, keywords = {Consumption and Savings, Net Worth and Assets, Retirement Planning and Satisfaction}, doi = {10.3386/w15469}, author = {Annamaria Lusardi and Olivia S. Mitchell and Vilsa Curto} } @article {8556, title = {Hypothetical versus Actual Earnings Profiles: Implications for Social Security Reform}, journal = {Journal of Financial Transformation}, volume = {24}, year = {2009}, pages = {102-04}, keywords = {Income, Older Adults, Social Security}, author = {Olivia S. Mitchell and John W R Phillips} } @article {8629, title = {Social Security Research at the Michigan Retirement Research Center}, journal = {Social Security Bulletin}, volume = {69}, year = {2009}, pages = {51-64}, chapter = {51}, abstract = {Social Security has been a topic of widespread discussion in the last decade. Rising longevity and falling fertility have led to an aging population, which increases solvency challenges for the Social Security system. Public concerns over low national saving have led to an extensive dialog on the merits of reform that might change the U.S. system into one with fully or partially funded personal accounts. Meanwhile, pensions in the private sector have been evolving from predominantly defined benefit (DB) to predominantly defined contribution (DC), raising concerns that workers preparing for retirement have more personal responsibility, with more complex financial challenges, than ever before.}, keywords = {Meta-analyses, Older Adults, Research, Social Security}, url = {https://www.ssa.gov/policy/docs/ssb/v69n4/v69n4p51.pdf}, author = {R.V. Burkhauser and Alan L Gustman and John Laitner and Olivia S. Mitchell and Amanda Sonnega} } @article {10725, title = {Social Security Research at the Michigan Retirement Research Center}, journal = {Social Security Bulletin}, volume = {69}, year = {2009}, type = {Journal}, abstract = {Social Security has been a topic of widespread discussion in the last decade. Rising longevity and falling fertility have led to an aging population, which increases solvency challenges for the Social Security system. Public concerns over low national saving have led to an extensive dialog on the merits of reform that might change the U.S. system into one with fully or partially funded personal accounts. Meanwhile, pensions in the private sector have been evolving from predominantly defined benefit (DB) to predominantly defined contribution (DC), raising concerns that workers preparing for retirement have more personal responsibility, with more complex financial challenges, than ever before.}, keywords = {Pension, Retirement, Social Security}, url = {https://www.ssa.gov/policy/docs/ssb/v69n4/v69n4p51.html}, author = {R.V. Burkhauser and Alan L Gustman and John Laitner and Olivia S. Mitchell and Amanda Sonnega} } @article {5707, title = {Planning and Financial Literacy: How do women fare?}, number = {13750}, year = {2008}, institution = {National Bureau of Economic Research}, address = {Cambridge, MA, }, abstract = {Many older US households have done little or no planning for retirement, and there is a substantial population that seems to undersave for retirement. Of particular concern is the relative position of older women, who are more vulnerable to old-age poverty due to their longer longevity. This paper uses data from a special module we devised on planning and financial literacy in the 2004 Health and Retirement Study. It shows that women display much lower levels of financial literacy than the older population as a whole. In addition, women who are less financially literate are also less likely to plan for retirement and be successful planners. These findings have important implications for policy and for programs aimed at fostering financial security at older ages.}, keywords = {Net Worth and Assets, Retirement Planning and Satisfaction, Women and Minorities}, doi = {10.3386/w13750}, author = {Annamaria Lusardi and Olivia S. Mitchell} } @article {5713, title = {Who Values the Social Security Annuity? New evidence on the annuity puzzle}, number = {13800}, year = {2008}, institution = {National Bureau of Economic Research }, address = {Cambridge, MA}, abstract = {We examine individuals{\textquoteright} self-reported willingness to exchange part of their Social Security inflation-indexed annuity benefit for an immediate lump-sum payment, using an experimental module in the 2004 Health and Retirement Study. Our first finding is that nearly three out of five respondents favor the lump-sum payment if it were approximately actuarially fair, a finding that casts doubt on several leading explanations for why more people do not annuitize. Second, there is some modest price sensitivity and evidence consistent with adverse selection; in particular, people in better health and having more optimistic longevity expectations are more likely to choose the annuity. Third, after controlling on education, more financially literate individuals prefer the annuity. Fourth, people anticipating future Social Security benefit reductions are more likely to choose the lump-sum, suggesting that political risk matters. Other factors such as sex, marital status, income, wealth, or the presence of children are not associated with respondents{\textquoteright} relative preferences for the annuity versus the lump-sum.}, keywords = {Methodology, Net Worth and Assets, Pensions, Social Security}, doi = {10.3386/w13800}, author = {Brown, Jeffrey R. and Casey, Marcus D. and Olivia S. Mitchell} } @article {7124, title = {Baby Boomer Retirement Security: The Roles of Planning, Financial Literacy, and Housing Wealth}, journal = {Journal of Monetary Economics}, volume = {54}, year = {2007}, note = {Revision of MRRC WP 2006-114}, pages = {205-224}, publisher = {54}, abstract = {Recent research on wealth and household finances seeks to blend neoclassical models with an understanding of real-world imperfections to answer questions about why some people save and others do not. This paper focuses on Baby Boomers standing on the verge of retirement, many of whom have saved little and will face financial insecurity in old age. The new 2004 wave of the Health and Retirement Study is invaluable for this first analysis of the financial situation of leading-edge Boomers, as it reports not only wealth levels but also information about respondents planning behaviors and economic literacy. We show that the distribution of net worth among Early Baby Boomers is quite skewed; those in the 75th percentile had over 10 times the net worth ( 400K) of households in the bottom 25th percentile ( 37K). There is substantial heterogeneity in wealth within this cohort: the median high-school dropout had less than 23K in total net worth, while the median college graduate had over 10 times as much. Many Black and Hispanic Boomer households hold miniscule levels of wealth. Further, many in this cohort have accumulated little wealth outside their homes: at the mean, one third of the early Boomers wealth is held in the form of home equity, and at the median the fraction is close to half. Since many members of this EBB cohort are reaching retirement with a substantial portion of its wealth in housing, they are particularly vulnerable to housing value shocks. By contrast, holders of stocks, IRAs, and business equity are concentrated in the top quartiles. Finally, we show that planning and economic literacy are important predictors of savings and investment success.}, keywords = {Housing, Net Worth and Assets}, doi = {https://doi.org/10.1016/j.jmoneco.2006.12.001}, author = {Annamaria Lusardi and Olivia S. Mitchell} } @inbook {5212, title = {Cross-Cohort Differences in Health on the Verge of Retirement}, booktitle = {Redefining Retirement: How Will Boomers Fare?}, year = {2007}, note = {ProCite field 6 : In ProCite field 8 : eds}, publisher = {Oxford University Press}, organization = {Oxford University Press}, address = {New York, NY}, abstract = {Baby Boomers have left a unique imprint on US culture and society in the last 60 years, and it might be anticipated that they will also put their own stamp on retirement, the last phase of the life cycle. Yet because Boomers have not all fully retired, we cannot yet judge how they will fare as retirees. Instead, we focus on how this group compares with prior groups on the verge of retirement, that is, at ages 51-56. Accordingly, this chapter evaluates the stock of health which Early Boomers bring to retirement and compare these to the circumstances of two prior cohorts at the same point in their life cycles. Using three sets of responses from the Health and Retirement Study, we find some interesting patterns. Overall, the raw evidence indicates that Boomers on the verge of retirement are in poorer health their counterparts 12 years ago. Using a summary health index designed for this study, we find that those born 1948 to 1953 share health risks with the War Baby cohort. This suggests that most of the health decline instead began before the late 1940{\textquoteright}s. A more complex set of health conclusions emerges from the specific self-reported health measures. Boomers indicate they have relatively more difficulty with a range of everyday physical tasks, but they also report having more pain, more chronic conditions, more drinking and psychiatric problems, than their HRS earlier counterparts. This trend portends poorly for the future health of Boomers as they age and incur increasing costs associated with health care and medications. Using our health index, only those at the 75th percentile or higher are likely to be characterized as having good or better health.}, keywords = {Health Conditions and Status, Other, Retirement Planning and Satisfaction}, doi = {10.3386/w12762}, author = {Beth J Soldo and Olivia S. Mitchell and Tfaily, Rania and John McCabe} } @inbook {5191, title = {Lifetime Earnings Variability and Retirement Shortfalls}, booktitle = {Retirement Provision in Scary Markets}, year = {2007}, note = {ProCite field 6 : In ProCite field 8 : ed.}, pages = {78-99}, publisher = {Edward Elgar}, organization = {Edward Elgar}, address = {Cheltenham:UK}, keywords = {Net Worth and Assets}, author = {Olivia S. Mitchell and John W R Phillips and Au, Andrew}, editor = {Hazel Bateman} } @book {5277, title = {Redefining Retirement: How Will Boomers Fare?}, year = {2007}, note = {ProCite field 8 : eds}, publisher = {Oxford University Press}, organization = {Oxford University Press}, address = {New York, NY}, keywords = {Consumption and Savings, Health Conditions and Status, Income, Medicare/Medicaid/Health Insurance, Net Worth and Assets, Pensions}, url = {https://pensionresearchcouncil.wharton.upenn.edu/publications/books/redefining-retirement-how-will-boomers-fare/}, author = {Brigitte C. Madrian and Olivia S. Mitchell and Beth J Soldo} } @inbook {5208, title = {Saving Between Cohorts: The Role of Planning}, booktitle = {Redefining Retirement: How Will Boomers Fare?}, year = {2007}, note = {ProCite field 6 : In ProCite field 8 : eds}, publisher = {Oxford University Press}, organization = {Oxford University Press}, address = {New York, NY}, abstract = {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.}, keywords = {adequacy, Baby Boomer, Education, Housing, Income, minorities, Retirement Planning, Saving}, url = {https://oxford.universitypressscholarship.com/view/10.1093/acprof:oso/9780199230778.001.0001/acprof-9780199230778-chapter-13}, author = {Annamaria Lusardi and Beeler, Jason}, editor = {Brigitte C. Madrian and Olivia S. Mitchell and Beth J Soldo} } @inbook {8645, title = {Will Boomers Redefine Retirement?}, booktitle = {Redefining Retirement: How Will Boomers Fare?}, year = {2007}, pages = {1-12}, publisher = {Oxford University Press}, organization = {Oxford University Press}, address = {Oxford, UK}, author = {Olivia S. Mitchell} } @article {5644, title = {Financial Literacy and Retirement Preparedness: Evidence and Implications for Financial Education Programs}, year = {2006}, institution = {Michigan Retirement Research Center, University of Michigan}, address = {Ann Arbor, MI}, abstract = {Economists are beginning to investigate the causes and consequences of financial illiteracy to better understand why retirement planning is lacking and why so many households arrive close to retirement with little or no wealth. Our review reveals that many households are unfamiliar with even the most basic economic concepts needed to make saving and investment decisions. Such financial illiteracy is widespread: the young and older people in the United States and other countries appear woefully under-informed about basic financial computations, with serious implications for saving, retirement planning, mortgages, and other decisions. In response, governments and several nonprofit organizations have undertaken initiatives to enhance financial literacy. The experience of other countries, including a saving campaign in Japan as well as the Swedish pension privatization program, offers insights into possible roles for financial literacy and saving programs.}, keywords = {Net Worth and Assets, Retirement Planning and Satisfaction}, doi = {10.2145/20070104}, author = {Annamaria Lusardi and Olivia S. Mitchell} } @article {5651, title = {Social Security Replacement Rates for Alternative Earnings Benchmarks}, number = {WP2006-06}, year = {2006}, institution = {The Wharton School, University of Pennsylvania}, address = {Philadelphia, PA}, abstract = {Social Security reform proposals are often presented in terms of their differential impacts on hypothetical or example workers. Our work explores how different benchmarks produce different replacement rate outcomes. We use the Health and Retirement Study (HRS) to evaluate how Social Security benefit replacement rates differ for actual versus hypothetical earner profiles, and we examine whether these findings are sensitive to alternative definitions of replacement rates. We find that workers with the median HRS profile would be estimated to receive benefits worth 55 of lifetime average earnings, versus 48 for the SSA medium scaled profile. Since US policymakers tend to prefer a replacement rate measure tied to workers own past earnings, using these metrics would yield higher replacement rates compared to commonly used scaled illustrative profiles. However, benchmarks that use population as opposed to individual earnings measures to compare individual worker benefits to pre-retirement consumption produce lower replacement rates for HRS versus hypothetical earners.}, keywords = {Public Policy, Social Security}, url = {https://pensionresearchcouncil.wharton.upenn.edu/publications/papers-2018/social-security-replacement-rates-for-alternative-earnings-benchmarks/}, author = {John W R Phillips and Olivia S. Mitchell} } @article {7103, title = {Social Security Replacement Rates for Alternative Earnings Benchmarks}, journal = {Benefits Quarterly}, volume = {22}, year = {2006}, pages = {37}, publisher = {22}, abstract = {Social Security reform proposals are often presented in terms of their differential impacts on hypothetical or example workers. This article explores how different benchmarks produce different replacement rate outcomes. The authors use the Health and Retirement Study (HRS) from the University of Michigan to evaluate how Social Security benefit replacement rates differ for actual versus hypothetical earner profiles, and examine whether these findings are sensitive to alternative definitions of replacement rates. They conclude that more precise analyses of possible distributional patterns from Social Security reform proposals would follow if benefit estimates were derived from actual earnings profiles, rather than hypothetical scaled patterns.}, keywords = {Retirement Planning and Satisfaction, Social Security}, author = {Olivia S. Mitchell and John W R Phillips} } @inbook {8630, title = {Changing the Retirement Paradigm}, booktitle = {Reinventing the Retirement Paradigm}, year = {2005}, pages = {3-13}, publisher = {Oxford University Press}, organization = {Oxford University Press}, address = {Oxford, UK}, author = {Robert Clark and Olivia S. Mitchell} } @article {5630, title = {Financial Literacy and Planning: Implications for Retirement Well-Being}, year = {2005}, institution = {The University of Michigan, Michigan Retirement Research Center}, abstract = {Only a minority of American households feels confident about retirement saving adequacy, and little is known about why people fail to plan for retirement, and whether planning and information costs might affect retirement saving patterns. To better understand these issues, we devised and fielded a purpose-built module on planning and financial literacy for the 2004 Health and Retirement Study (HRS). This module measures how workers make their saving decisions, how they collect the information for making these decisions, and whether they possess the financial literacy needed to make these decisions. Our analysis shows that financial illiteracy is widespread among older Americans: only half of the age 50 respondents could correctly answer two simple questions regarding interest compounding and inflation, and only one-third correctly answered these two questions and a question about risk diversification. Women, minorities, and those without a college degree were particularly at risk of displaying low financial knowledge. We also evaluate whether people tried to figure out how much they need to save for retirement, whether they devised a plan, and whether they succeeded at the plan. In fact, these calculations prove to be difficult: fewer than one-third of our age 50 respondents ever tried to devise a retirement plan, and only two-thirds of those who tried actually claim to have succeeded. Overall, fewer than one-fifth of the respondents believed they engaged in successful retirement planning. We also find that financial knowledge and planning are clearly interrelated: those who displayed financial knowledge were more likely to plan and to succeed in their planning. Moreover, those who did plan were more likely to rely on formal methods such as retirement calculators, retirement seminars, and financial experts, and less likely to rely on family/relatives or co-workers.}, keywords = {Net Worth and Assets, Retirement Planning and Satisfaction}, author = {Annamaria Lusardi and Olivia S. Mitchell} } @article {5640, title = {Saving Shortfalls and Delayed Retirement}, number = {2005-094}, year = {2005}, institution = {Michigan Retirement Research Center, University of Michigan}, address = {Ann Arbor, MI}, abstract = {Prior research has suggested that many older Americans have not saved enough to maintain consumption levels in old age. One way older persons might respond to inadequate savings would be to extend their worklives by delaying retirement. This paper examines evidence on this matter using the Health and Retirement Study, a nationally representative panel survey of people age 51-61 in 1992 followed for several years in a panel. We use the data to project household retirement assets and to determine how much more saving would be needed to preserve post-retirement consumption levels. Our research then examines the links between derived saving shortfall measures and delayed retirement patterns. Among nonmarried persons, there is evidence that larger shortfalls do produce delayed retirement, though the effect is not quantitatively large. For married couples, pre-retirement wealth shortfalls do not appear to be significantly associated with delayed retirement. Evidently couples have other means of handling saving shortfalls.}, keywords = {Consumption and Savings, Retirement Planning and Satisfaction}, url = {https://deepblue.lib.umich.edu/handle/2027.42/50525}, author = {Au, Andrew and Olivia S. Mitchell and John W R Phillips} } @article {5584, title = {Crime and Early Retirement Among Older Americans}, number = {WP2004-21}, year = {2004}, institution = {University of Pennsylvania Population Aging Resear}, address = {Philadelphia, PA}, abstract = {This paper investigates the relationship between local crime rates and the retirement decisions of older Americans. We do so by linking data from the Health and Retirement Study with measures of local crime patterns taken from the Federal Bureau of Investigation s Unified Crime Reports. If we condition on crime rates alone, there is either a weakly positive or no relationship between local crime patterns and older men s propensity to retire early. But unobservable factors associated with early retirement may be correlated with residence in higher-crime rate cities, so next we condition on both the expectation for the crime rate and deviations from average crime levels. We find a positive and statistically significant association between early retirement and expectations for murder rates, and a positive but, on average, imprecisely estimated positive association between early retirement and unexpected increases in crime. The effect of unanticipated increases in crime is greatest, and significant for those in poor health. In this latter group, men are 14 percent more likely to retire early given a standard deviation increase in unexpected murder rates. These findings are consistent with a pattern of more early retirement among those who live in higher crime areas, and earlier retirement among those in poor health when crime levels rise above anticipated levels.}, keywords = {Health Conditions and Status, Retirement Planning and Satisfaction}, url = {https://repository.upenn.edu/prc_papers/412/}, author = {Daniel S. Silverman and Olivia S. Mitchell} } @inbook {5189, title = {Financial Education and Saving}, booktitle = {Pension Design and Structure: New Lessons from Behavioral Economics}, year = {2004}, note = {RDA 1998-002 ProCite field 6 : In ProCite field 8 : eds.}, publisher = {Oxford University Press}, organization = {Oxford University Press}, abstract = {In this paper, I examine the financial situation of older households. In addition, I examine whether employers{\textquoteright} initiatives to reduce planning costs via retirement seminars have an effect on workers{\textquoteright} saving. Using data from the Health and Retirement Study, I first show that many families arrive close to retirement with little or no wealth. Portfolios are also rather simple, and many families, particularly those with low education, hold little or no high-return assets. I further show that seminars foster saving. This is particularly the case for those with low education and those who save little. By offering financial education, both financial and total net worth increase sharply, particularly for families at the bottom of the wealth distribution and those with low education. Retirement seminars also increase total wealth (inclusive of pension and Social Security) for both high and low education families. Taken together, this evidence suggests that retirement seminars can foster wealth accumulation and bolster financial security in retirement.}, keywords = {Education, Net Worth and Assets, Retirement Planning and Satisfaction}, url = {https://www.dartmouth.edu/~alusardi/Papers/Financial_Education_2004.pdf}, author = {Annamaria Lusardi}, editor = {Olivia S. Mitchell and Utkus, S.} } @article {8554, title = {The Impact of Health Status and Out-of-Pocket Medical Expenditures on Annuity Valuation}, number = {wp086}, year = {2004}, institution = {Michigan Retirement Research Center, University of Michigan}, address = {Ann Arbor, MI}, abstract = {This paper describes how differences in health status at retirement can influence the decision to purchase a life annuity. We extend previous research on annuitization decisions by incorporating the effect of health differentials via differences in survival throughout the latter portion of life. Next, we consider how precautionary savings motivated by uncertain out-of-pocket medical expenses influence annuitization decisions. Our results show that annuities become less attractive to people facing uncertain medical expenses. While full annuitization would still be optimal if annuity markets were truly complete and both life- and health-contingent, lacking this, annuity equivalent wealth values are much lower for those in poor health, as compared to persons in good health.}, keywords = {Annuitization, Health Insurance, Medicare/Medicaid/Health Insurance, Older Adults}, url = {https://ideas.repec.org/p/mrr/papers/wp086.html}, author = {Cassio M. Turra and Olivia S. Mitchell} } @article {5606, title = {Modeling Lifetime Earnings Paths: Hypothetical versus Actual Workers}, year = {2004}, institution = {University of Pennsylvania, Boettner Center for Pe, Pension Research Council WP 2004-3}, abstract = {To assess the distributional effects of social security reform proposals, it is essential to have good information on real-world workers lifetime earnings trajectories. Until recently, however, policymakers have relied on hypothetical earnings profiles for policy analysis. We use actual lifetime earnings data from the Health and Retirement Study (HRS) to compare actual workers covered earnings profiles to these hypothetical profiles. We show that the hypothetical profiles do not track earnings patterns of current retirees; thus lifetime pay levels are much higher than for most HRS workers. Therefore, using hypothetical profiles could misrepresent benefits paid and taxes collected under such reforms.}, keywords = {Net Worth and Assets, Pensions, Social Security}, author = {Olivia S. Mitchell and John W R Phillips and Au, Andrew} } @book {5273, title = {Benefits for the Future Workplace}, year = {2003}, note = {ProCite field 8 : eds.}, publisher = {University of Pennsylvania Press}, organization = {University of Pennsylvania Press}, address = {Philadelphia, PA}, keywords = {Employment and Labor Force, Pensions}, author = {Olivia S. Mitchell and Blitzstein, David and Mazo, Judy and Gordon, Michael} } @article {6866, title = {Guaranteeing Defined Contribution Pensions: The Option to Buy Back a Defined Benefit Promise}, journal = {Journal of Risk and Insurance}, volume = {70}, year = {2003}, publisher = {70}, abstract = {After a long commitment to defined benefit (DB) pension plans for U.S. public sector employees, many state legislatures have introduced defined contribution (DC) plans for their public employees. In this process, investment risk that was previously borne by state DB plans has now devolved to employees covered by the new DC plans. In light of this trend, some states have introduced a guarantee mechanism to help protect DC plan participants. One such guarantee takes the form of an option permitting DC plan participants to buy back their DB benefit for a price. This article develops a theoretical framework to analyze the option design and illustrate how employee characteristics influence the option{\textquoteright}s cost. We illustrate the potential impact of a buy-back option in a pension reform enacted recently by the State of Florida for its public employees. If employees were to exercise the buy-back option optimally, the market value of this option could represent up to 100 percent of the DC contributions over their work life.}, keywords = {Pensions}, url = {https://ssrn.com/abstract=388535}, author = {Lachance, Marie-Eve and Olivia S. Mitchell and Smetters, Kent} } @article {5567, title = {Lifetime Earnings Variability and Retirement Wealth}, number = {2003-051}, year = {2003}, institution = {Michigan Retirement Research Center at the University of Michigan, }, address = {Ann Arbor, MI}, abstract = {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.}, keywords = {Income, Net Worth and Assets}, doi = {https://dx.doi.org/10.2139/ssrn.1091441}, author = {Olivia S. Mitchell and John W R Phillips and Au, Andrew and McCarthy, David} } @article {8631, title = {Perspectives from the President{\textquoteright}s Commission on Social Security Reform}, journal = {Journal of Economic Perspectives}, volume = {17}, year = {2003}, pages = {149-172}, chapter = {149}, abstract = {Social Security faces a severe financial problem. In about 15 years, the program will begin to experience permanent annual cash deficits, when annual benefit payments will exceed the amount collected in payroll tax revenues. By 2041, according to the Social Security Trustees 2002 Report, the Social Security trust fund is projected to be insolvent, meaning that the program will be legally unable to pay scheduled benefits. One way of expressing the financial shortfall is to compute the present value of the difference between system outlays and revenues over a 75-year horizon, which is currently equal to a permanent and immediate tax rate increase of 1.86 percent of payroll, or equivalent to $3.2 trillion in present value. If the policy of pay-as-you-go financing is continued for the next 25 years, a 50 percent payroll tax increase will be required at that time to pay scheduled benefits.}, keywords = {Older Adults, Retirement Planning and Satisfaction, Social Security, Taxes}, url = {https://web.stanford.edu/class/econ21si/coganmitchell_prescommission.pdf}, author = {John F. Cogan and Olivia S. Mitchell} } @article {5547, title = {Retirement Wealth and Lifetime Earnings Variability}, number = {WP2003-04}, year = {2003}, note = {RDA}, institution = {University of Pennsylvania, Wharton School}, address = {Philadelphia}, abstract = {This paper explores understand how earnings variability influences peoples{\textquoteright} retirement preparedness by influencing their accumulated wealth levels as of retirement age. Prior research has demonstrated that the US average household nearing retirement would need to save substantially more in order to preserve consumption in old age. While some socioeconomic factors have been suggested that might explain shortfalls, previous 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. We evaluate 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 key links between lifetime earnings variability and retirement wealth.}, keywords = {Net Worth and Assets, Social Security}, url = {https://pensionresearchcouncil.wharton.upenn.edu/publications/papers-2018/retirement-wealth-and-lifetime-earnings-variability/}, author = {Olivia S. Mitchell and John W R Phillips and Au, Andrew and McCarthy, David} } @inbook {5188, title = {Aging and Housing Equity}, booktitle = {Innovations in Retirement Financing}, year = {2002}, note = {ProCite field 6 : In ProCite field 8 : eds.}, publisher = {University of Pennsylvania Press/Pension Research Council}, organization = {University of Pennsylvania Press/Pension Research Council}, address = {Philadephia, PA}, keywords = {Housing}, url = {http://www.nber.org/papers/w7882}, author = {Steven F Venti and David A Wise}, editor = {Zvi Bodie and P. Brett Hammond and Olivia S. Mitchell and Stephen P. Zeldes} } @article {10964, title = {Guaranteeing Defined Contribution Pensions: The Option to Buy-Back a Defined Benefit Promise}, number = {8731}, year = {2002}, institution = {The National Bureau of Economic Research}, address = {Cambridge, MA}, keywords = {buy-back option, Pension plans}, doi = {10.3386/w8731}, author = {Lachance, Marie-Eve and Olivia S. Mitchell} } @book {5272, title = {Innovations in Retirement Financing}, year = {2002}, note = {ProCite field 8 : eds.}, publisher = {University of Pennsylvania Press}, organization = {University of Pennsylvania Press}, address = {Philadelphia, PA}, keywords = {Consumption and Savings}, url = {https://pensionresearchcouncil.wharton.upenn.edu/publications/books/innovations-in-retirement-financing/}, author = {Zvi Bodie and P. Brett Hammond and Olivia S. Mitchell and Stephen P. Zeldes} } @inbook {5134, title = {Worklife Determinants of Retirement Income Differentials Between Men and Women}, booktitle = {Innovations in Financing Retirement}, year = {2002}, note = {RDA ProCite field 6 : In ProCite field 8 : eds.}, pages = {50-76}, publisher = {University of Pennsylvania Press}, organization = {University of Pennsylvania Press}, address = {Philadelphia, PA}, abstract = {Women enter retirement having spent fewer years in market, earned less over their lifetimes, and work in different jobs than men of the same age. This study examines whether these differences in work life experiences help explain why many women end with lower level of retirement income in old age. We use Health and Retirement Study (HRS), which provide information on labor market histories along with the ability to predict retirement income from employer pensions, social security benefits, and investment returns. We document differences in anticipated retirement income by sex that exist largely between non-married men and women. Multivariate models show that 85 percent of this retirement income gap can be attributed to differences in lifetime labor market earnings, years worked, and occupational segregation by sex. Our results suggest that as women{\textquoteright}s work life experiences become more congruent with men{\textquoteright}s over time, the gap in retirement income between men and women may shrink.}, keywords = {Income, Methodology, Retirement Planning and Satisfaction, Women and Minorities}, url = {http://www.nber.org/papers/w7243}, author = {Phillip B. Levine and Olivia S. Mitchell and John W R Phillips}, editor = {Z. Bodie and Hammond, B. and Olivia S. Mitchell} } @article {5446, title = {Eligibility for Social Security Disability Insurance}, year = {2001}, institution = {Philadephia, PA, University of Pennsylvania, The Wharton School}, keywords = {Disabilities, Insurance, Social Security}, url = {http://prc/wharton.upenn.edu/prc/prc.html}, author = {Olivia S. Mitchell and John W R Phillips} } @article {6682, title = {A Benefit of One{\textquoteright}s Own: Older Women{\textquoteright}s Entitlement to Social Security Retirement}, journal = {Social Security Bulletin}, volume = {63}, year = {2000}, note = {RDA 1996-006 ProCite field 3 : Wellesley College; U PA; US Social Security Administration}, pages = {47-53}, publisher = {63}, abstract = {Using data from the Health and Retirement Study (HRS) and linked administrative records, we explore differences in old-age benefits between men and women attributable to differences in length of work life and pay. We find that most women are fully insured for Social Security purposes, but those who are not would have to work substantially more to become eligible. Among those who are eligible, additional work would translate into only slightly higher benefits.}, keywords = {Consumption and Savings, Health Conditions and Status, Methodology, Retirement Planning and Satisfaction, Social Security, Women and Minorities}, url = {https://www.ssa.gov/policy/docs/ssb/v63n3/v63n3p47.pdf}, author = {Phillip B. Levine and Olivia S. Mitchell and John W R Phillips} } @inbook {5164, title = {Developments in Pensions}, booktitle = {Handbook of Insurance}, year = {2000}, note = {ProCite field 6 : In ProCite field 8 : ed.}, publisher = {Kluwer Academic Publishers}, organization = {Kluwer Academic Publishers}, address = {Boston/Dordrecht/London}, abstract = {A single reference source for professors, researchers, graduate students, regulators, consultants and practitioners, the book starts with the history and foundations of risk and insurance theory, followed by a review of prevention and precaution, asymmetric information, risk management, insurance pricing, new financial innovations, reinsurance, corporate governance, capital allocation, securitization, systemic risk, insurance regulation, the industrial organization of insurance markets and other insurance market applications. It ends with health insurance, longevity risk, long-term care insurance, life insurance financial products and social insurance.}, keywords = {Insurance, Pensions}, url = {https://www.springer.com/us/book/9781461401544}, author = {Olivia S. Mitchell}, editor = {Dionne, Georges} } @inbook {5168, title = {Early Retirement Windows}, booktitle = {Forecasting Retirement Needs and Retirement Wealth}, year = {2000}, note = {ProCite field 8 : eds}, pages = {253-273}, publisher = {Univ. of Pennsylvania Press}, organization = {Univ. of Pennsylvania Press}, chapter = {9}, address = {Philadelphia}, keywords = {Net Worth and Assets, Retirement Planning and Satisfaction}, url = {https://pensionresearchcouncil.wharton.upenn.edu/publications/books/forecasting-retirement-needs-and-retirement-wealth/}, author = {Charles Brown}, editor = {Olivia S. Mitchell and Hammond, B. and Rappaport, A.} } @inbook {5144, title = {Evaluating Pension Entitlements}, booktitle = {Forecasting Retirement Needs and Retirement Wealth}, year = {2000}, note = {RDA 1996-005; Revision of Pension Research Council Working Paper 98-20 ProCite field 8 : eds.}, pages = {309-326}, publisher = {University of Pennsylvania Press}, organization = {University of Pennsylvania Press}, chapter = {12}, address = {Philadelphia}, keywords = {Net Worth and Assets, Pensions, Public Policy}, url = {https://pensionresearchcouncil.wharton.upenn.edu/publications/books/forecasting-retirement-needs-and-retirement-wealth/}, author = {Alan L Gustman and Olivia S. Mitchell and Andrew A. Samwick and Thomas L. Steinmeier}, editor = {Olivia S. Mitchell and Hammond, B. and Rappaport, A.} } @inbook {5147, title = {Explaining Retirement Saving Shortfalls}, booktitle = {Forecasting Retirement Needs and Retirement Wealth}, year = {2000}, note = {RDA 1996-002; Revision of Pension Research Council Working Paper 98-13 ProCite field 6 : In ProCite field 8 : eds.}, pages = {139-63}, publisher = {University of Pennsylvania Press}, organization = {University of Pennsylvania Press}, chapter = {5}, address = {Philadelphia}, keywords = {consumption, Savings}, url = {https://pensionresearchcouncil.wharton.upenn.edu/publications/books/forecasting-retirement-needs-and-retirement-wealth/}, author = {Olivia S. Mitchell and James Moore and John W R Phillips}, editor = {Olivia S. Mitchell and Hammond, B. and Rappaport, A.} } @book {5268, title = {Forecasting Retirement Needs and Retirement Wealth}, year = {2000}, note = {RDA 1996-002 ProCite field 8 : eds.}, publisher = {University of Pennsylvania Press}, organization = {University of Pennsylvania Press}, address = {Philadelphia, PA}, abstract = {Thirteen papers draw on data from the Health and Retirement Study and from other sources to explore people{\textquoteright}s preparation for and the financial challenges of retirement in the United States. Papers discuss new paths to retirement; how prepared Americans are for retirement; projected retirement wealth and saving adequacy; individual savings and investment choices associated with 401(k) plans; factors explaining retirement savings shortfalls; women{\textquoteright}s economic well -being at the end of their work lives and the factors that appear to be associated with the poorer economic status of older women relative to older men; the prospects for widow poverty; minorities facing retirement; early retirement windows; the relationship between people{\textquoteright}s expectations about their retirement, their realizations of retirement, and the role of health shocks in this process; planning for health care needs in retirement; the evaluation of pension entitlements; social security earnings and projected benefits. Mitchell is at the Wharton School, University of Pennsylvania. Hammond is with the Teachers Insurance Annuity Association-College Retirement Equities Fund (TIAA -CREF). Rappaport is at William M. Mercer, Inc. Index.}, keywords = {Consumption and Savings, Health Conditions and Status, Healthcare, Pensions, Retirement Planning and Satisfaction, Women and Minorities}, url = {https://pensionresearchcouncil.wharton.upenn.edu/publications/books/forecasting-retirement-needs-and-retirement-wealth/}, author = {Olivia S. Mitchell and P. Brett Hammond and Anna M. Rappaport} } @article {5406, title = {A Framework for Analyzing and Managing Retirement Risks}, year = {2000}, institution = {University of Pennsylvania}, abstract = {This paper provides an overview of new approaches and products to help people assess and meet their old-age security goals. We first examine retirement planning models and conclude that many do not yet incorporate key types of uncertainty deemed essential to economists and finance experts, including cross-asset correlations. Many financial planners also fall short of using the full range of tools of risk management {\textendash} hedging, insurance, and diversification {\textendash} to guide those making retirement plans. Turning to innovation, we examine several financial products that appear to offer new opportunities to protect against old-age risk. These products include inflation-linked annuities, survivor bonds, long-term care insurance, and reverse annuity mortgages. Some of the innovations arise from bundling existing insurance products. We also suggest that the arrival of new products to market that could protect retirement income have been slowed by market failures and institutional rigidities as well as information barriers; these have limited international diversification in investments, among other outcomes. There remains a profoundly important role for additional economic and financial research to better inform stakeholders on the costs and benefits of developing innovative products for retirement security}, keywords = {Retirement Planning and Satisfaction}, url = {https://d1wqtxts1xzle7.cloudfront.net/44924857/A_Framework_for_Analyzing_and_Managing_R20160420-17161-ufe5km.pdf?1461169548=\&response-content-disposition=inline\%3B+filename\%3DA_Framework_for_Analyzing_and_Managing_R.pdf\&Expires=1593708427\&Signature=ZBcdaC}, author = {Olivia S. Mitchell and Zvi Bodie} } @inbook {5120, title = {Minorities Face Retirement: Worklife Disparities Repeated?}, booktitle = {Forecasting Retirement Needs and Retirement Wealth}, year = {2000}, note = {ProCite field[3]: CUNYProCite field[6]: InProCite field[8]: eds.}, pages = {235-52}, publisher = {University of Pennsylvania Press}, organization = {University of Pennsylvania Press}, chapter = {8}, address = {Philadelphia}, keywords = {Consumption and Savings, Retirement Planning and Satisfaction, Women and Minorities}, url = {https://pensionresearchcouncil.wharton.upenn.edu/publications/books/forecasting-retirement-needs-and-retirement-wealth/}, author = {Honig, Marjorie}, editor = {Olivia S. Mitchell and P. Brett Hammond and Anna M. Rappaport} } @article {8628, title = {Mortality Risk, Inflation Risk, and Annuity Products}, number = {7812}, year = {2000}, month = {07/2000}, pages = {1-34}, institution = {National Bureau of Economic Research}, address = {Cambridge, MA}, abstract = {As growing numbers of retirees reach retirement age with substantial balances in self-directed retirement plans, annuities are likely to become increasingly important instruments for drawing down retirement savings. This study explores recent trends in the pricing of single-premium annuity products in the United States. Virtually all of the annuity products currently available in the United States offer fixed nominal payouts, rather than an inflation-linked payout stream. After describing the money{\textquoteright}s worth{\textquoteright} of the various types of nominal annuity products, this study considers the extent to which existing U.S. private annuity markets provide retirees with inflation-protected retirement income flows. Although there is effectively no market yet for inflation-indexed annuities in the United States, such products are available in other countries. The paper concludes by summarizing recent data on the pricing of both nominal and inflation-linked annuities in the United Kingdom and several other nations.}, keywords = {Annuitization, Mortality, Older Adults, Risk Factors}, url = {https://www.nber.org/papers/w7812.pdf}, author = {Brown, Jeffrey R. and Olivia S. Mitchell and James M. Poterba} } @inbook {5167, title = {New Paths to Retirement}, booktitle = {Forecasting Retirement Needs and Retirement Wealth}, year = {2000}, note = {ProCite field 8 : eds.}, pages = {13-32}, publisher = {Univ. of Pennsylvania Press}, organization = {Univ. of Pennsylvania Press}, address = {Philadelphia}, keywords = {Consumption and Savings, Employment and Labor Force, Net Worth and Assets, Retirement Planning and Satisfaction}, url = {https://pensionresearchcouncil.wharton.upenn.edu/publications/books/forecasting-retirement-needs-and-retirement-wealth/}, author = {Joseph F. Quinn}, editor = {Olivia S. Mitchell and Hammond, B. and Rappaport, A.} } @inbook {5148, title = {Projected Retirement Wealth and Saving Adequacy in the Health and Retirement Study}, booktitle = {Forecasting Retirement Needs and Retirement Wealth}, year = {2000}, note = {RDA 1996-002; Revision of NBER Working Paper No. 6240 ProCite field 8 : eds.}, pages = {68-94}, publisher = {Univ. of Pennsylvania Press}, organization = {Univ. of Pennsylvania Press}, chapter = {3}, address = {Philadelphia}, abstract = {In the future it is likely that retirees will have to take on more of the burden of ensuring their own well-being then is now the case. This is because of the growing population over the age of 65 that is causing the social security surplus to wither away and the ongoing trend toward defined contribution retirement plans rather then defined benefit plans. However, household savings rates have plunged over the last half-century and this causes one to wonder how people will maintain their current consumption levels when retired. The authors use the first wave (1992) of the Health and Retirement Study in order to illustrate a life cycle model of savings. These researchers also look at initial and projected wealth, savings needs, replacement rates, and income. They find that the median current wealth of older households is 325,000, including retirement plans and assets, and they feel that at retirement the median wealth will be 380,000. At the same time though the median older household will need a savings rate of 16 in order to maintain current consumption levels in retirement.}, keywords = {Consumption and Savings, Net Worth and Assets}, url = {https://pensionresearchcouncil.wharton.upenn.edu/publications/books/forecasting-retirement-needs-and-retirement-wealth/}, author = {James Moore and Olivia S. Mitchell}, editor = {Olivia S. Mitchell and Hammond, B. and Rappaport, A.} } @inbook {5128, title = {Prospects for Widow Poverty}, booktitle = {Forecasting retirement needs and retirement wealth.}, series = {Pension Research Council Publications.:}, year = {2000}, note = {ProCite field[8]: eds.}, pages = {208 -34}, publisher = {University of Pennsylvania Press}, organization = {University of Pennsylvania Press}, address = {Philadelphia}, keywords = {Consumption and Savings, Methodology, Net Worth and Assets, Retirement Planning and Satisfaction}, author = {David R Weir and Robert J. Willis}, editor = {Olivia S. Mitchell and P. Brett Hammond and Anna M. Rappaport} } @inbook {5169, title = {Retirement Expectations and Realizations: The Role of Health Shocks and Economic Factors}, booktitle = {Forecasting Retirement Needs and Retirement Wealth}, year = {2000}, note = {ProCite field 8 : eds.}, pages = {274-287}, publisher = {Univ. of Pennsylvania Press}, organization = {Univ. of Pennsylvania Press}, address = {Philadelphia}, abstract = {This chapter explores the relationship between peoples{\textquoteright} expectations about retirement, their realizations of retirement, and the role of health shocks in this process. We look at how accurately people predict retirement and we examine the determinants of changes in retirement expectations. Expectations are made under uncertainty about future health, labor force status, household characteristics, and economic variables; therefore plans must frequently be updated with new information. While many factors influence the decision to retire, we are specifically interested in the role of health shocks in peoples{\textquoteright} decisions to alter their plans to retire. Research to date has recognized the importance of understanding the relationship between health and retirement; however, until now, information about health, work, and economic well-being was difficult to obtain in a single survey. The Health and Retirement Study (HRS) is the first national survey to combine comprehensive data on all of these areas. Nevertheless much of the early HRS research has used only the first wave of data, at which time many in the cohort were too young to retire. In this chapter we use new information on this group of people from wave 2, enabling us to observe this cohort moving into retirement. In what follows we first offer a brief discussion of the literature, and then discuss empirical models, data used in the analysis, results and conclusions.}, keywords = {Expectations, Health Conditions and Status, Retirement Planning and Satisfaction}, url = {https://www.researchgate.net/publication/23739676_Retirement_Expectations_and_Realizations_The_Role_of_Health_Shocks_and_Economic_Factors}, author = {Debra S. Dwyer and Hu, Jianting}, editor = {Olivia S. Mitchell and Hammond, B. and Rappaport, A.} } @article {5414, title = {Retirement Responses to early Social Security Benefit Reductions}, year = {2000}, institution = {National Bureau of Economic Research}, abstract = {Respondents who retire early are similar initially, in terms of their health, education, and wealth, to those who subsequently elect the normal retirement path. Both groups are healthier and better educated than those who take disability retirement. Analysis of the life-cycle budget constraint shows that cutting early Social Security benefits would have an uneven effect on beneficiaries. Respondents who are black, have lower levels of education, and are in poor health would suffer relatively large losses. This study finds that a cut in early Social Security benefits would result in more workers delaying benefit acceptance as opposed to taking disability benefits.}, keywords = {Disabilities, Employment and Labor Force, Event History/Life Cycle, Health Conditions and Status, Income, Insurance}, url = {http://www.nber.org/papers/w7963}, author = {Olivia S. Mitchell and John W R Phillips} } @inbook {5170, title = {Social Security Earnings and Projected Benefits}, booktitle = {Forecasting Retirement Needs and Retirement Wealth}, year = {2000}, pages = {327-359}, publisher = {Univ. of Pennsylvania Press}, organization = {Univ. of Pennsylvania Press}, address = {Philadelphia}, keywords = {Pensions, Social Security}, author = {Olivia S. Mitchell and Olson, Jan and Thomas L. Steinmeier}, editor = {Olivia S. Mitchell and Hammond, B. and Rappaport, A.} } @inbook {5146, title = {Women on the Verge of Retirement: Predictors of Retiree Well-Being}, booktitle = {Forecasting Retirement Needs and Retirement Wealth}, year = {2000}, note = {RDA 1996-002; Revision of Pension Research Council Working Paper 97-2 ProCite field 6 : In ProCite field 8 : eds.}, pages = {167-207}, publisher = {University of Pennsylvania Press}, organization = {University of Pennsylvania Press}, address = {Philadelphia}, keywords = {Retirement Planning and Satisfaction, Women and Minorities}, url = {https://www.researchgate.net/publication/23739651_Women_on_the_Verge_of_Retirement_Predictors_of_Retiree_Well-being}, author = {Phillip B. Levine and Olivia S. Mitchell and James Moore}, editor = {Olivia S. Mitchell and Hammond, B. and Rappaport, A.} } @article {6636, title = {Health problems as determinants of retirement: are self-rated measures endogenous?}, journal = {J Health Econ}, volume = {18}, year = {1999}, note = {RDA ProCite field 3 : US Social Security Administration; U PA}, month = {1999 Apr}, pages = {173-93}, publisher = {18}, abstract = {

We explore alternative measures of unobserved health status in order to identify effects of mental and physical capacity for work on older men{\textquoteright}s retirement. Traditional self-ratings of poor health are tested against more objectively measured instruments. Using the Health and Retirement Study (HRS), we find that health problems influence retirement plans more strongly than do economic variables. Specifically, men in poor overall health expected to retire one to two years earlier, an effect that persists after correcting for potential endogeneity of self-rated health problems. The effects of detailed health problems are also examined in depth.

}, keywords = {Health Services Research, Health Status Indicators, Humans, Male, Models, Statistical, Retirement, Self-Assessment, United States}, issn = {0167-6296}, doi = {10.1016/s0167-6296(98)00034-4}, author = {Debra S. Dwyer and Olivia S. Mitchell} } @inbook {5123, title = {New Developments in the Economic Analysis of Retirement}, booktitle = {Handbook of labor economics. Volume 3C}, series = {Handbooks in Economics}, year = {1999}, note = {ProCite field[3]: Brown U; U PAProCite field[8]: eds.}, pages = {3261-3307}, publisher = {Elsevier Science, North-Holland}, organization = {Elsevier Science, North-Holland}, chapter = {49}, address = {Amsterdam; New York and Oxford}, keywords = {Consumption and Savings, Employment and Labor Force, Pensions, Retirement Planning and Satisfaction, Social Security}, url = {https://eml.berkeley.edu/~saez/course/lumsdaine-mitchell1999handbook.pdf}, author = {Lumsdaine, Robin L. and Olivia S. Mitchell}, editor = {Ashenfelter, Orley and Card, David} } @article {10707, title = {New Evidence on the Money{\textquoteright}s Worth of Individual Annuities}, journal = {The American Economic Review}, volume = {89}, year = {1999}, pages = {1299-1318}, type = {Journal}, keywords = {Age, Annuity payments, Income taxes, Insurance premiums, Life annuities, Life insurance, Life Tables, Men, Mortality rates}, isbn = {00028282}, url = {https://www.jstor.org/stable/117059?seq=1}, author = {Olivia S. Mitchell and James M. Poterba and Mark J. Warshawsky and Brown, Jeffrey R.} } @inbook {5152, title = {Pension and Social Security Wealth in the Health and Retirement Study}, booktitle = {Wealth, Work and Health: Innovations in Measurement in the Social Sciences}, year = {1999}, note = {RDA 1996-005; Revision of Pension Research Council Working Paper PRC WP 97-3 ProCite field 8 : eds.}, pages = {150-208}, publisher = {University of Michigan Press}, organization = {University of Michigan Press}, address = {Ann Arbor, MI}, abstract = {This study attempts to understand the impact of pension and social security wealth on decisions made by people of retirement age. Their in-depth analysis of the Health and Retirement Study gives many interesting findings. Of those people participating in the Health and Retirement Study, more then half of the wealth is in the form of social security, pensions, and health insurance. Various topics are explored in this paper.}, keywords = {Net Worth and Assets, Pensions, Social Security}, author = {Alan L Gustman and Olivia S. Mitchell and Andrew A. Samwick and Thomas L. Steinmeier}, editor = {James P Smith and Robert J. Willis} } @book {8562, title = {Prospects for Social Security Reform}, series = {Pension Research Council Publications}, year = {1999}, publisher = {University of Pennsylvania Press}, organization = {University of Pennsylvania Press}, address = {Philadelphia}, keywords = {Older Adults, Retirement Planning and Satisfaction, Social Security}, isbn = {9780812234794}, url = {https://www.upenn.edu/pennpress/book/4266.html$\#$:~:text=Prospects\%20for\%20Social\%20Security\%20Reform\%20informs\%20the\%20debate\%20by\%20exploring,reform\%20might\%20affect\%20the\%20economy.}, author = {Olivia S. Mitchell and Myers, Robert and Young, Howard} } @conference {8638, title = {Would a Privatized Social Security System Really Pay a Higher Rate of Return?}, booktitle = {First Annual Joint Conference for the Retirement Research Consortium, "New Developments in Retirement Research"}, year = {1999}, month = {05/1999}, abstract = {Many advocates of social security privatization argue that rates of return under a defined contribution individual account system would be much higher for all than they are under the current social security system. This claim is false. The mistake comes from ignoring accrued benefits already promised based on past payroll taxes, and from underestimating the riskiness of stock investments. Confusion arises because three distinct reforms are muddled. By privatization we mean creating individual accounts (which could, for example, be invested exclusively in bonds). By diversification we mean investing in stocks, and perhaps other assets, as well as bonds; diversification might be undertaken either by individuals in their private social security accounts, or by the social security trust fund. By prefunding we mean closing the gap between social security benefits promised to date and the assets on hand to pay for them. Any one of these reforms could be implemented without the other two. If the system were completely privatized, with no prefunding or diversification, the social security system would need to raise new taxes in order to pay benefits already accrued. These added taxes would completely eliminate any rate of return advantage on the individual accounts. If the economy continued to grow at rates comparable to the last 25 years, and if real interest rates remained at levels comparable to their long run historical average, then the new taxes would amount to 3\% of payroll in perpetuity (which is a quarter of today{\textquoteright}s social security taxes). Unlike diversification, prefunding would raise rates of return for later generations, but at the cost of lower returns for today{\textquoteright}s workers. For households able to invest in the stock market on their own, diversification would not raise rates of return, correctly adjusted to recognize risk. Households that are constrained from holding stock, due to lack of wealth outside of social security or to fixed costs from holding stocks, would gain higher risk-adjusted returns and would benefit from diversification. If this group is large, diversification would raise stock values, thus helping current stockholders, but it would lower future stock returns, thus hurting young unconstrained households. Overall, since the number of truly constrained households is probably not that large, privatization and diversification would have a much smaller effect on returns than reformers typically claim.}, url = {https://www0.gsb.columbia.edu/mygsb/faculty/research/pubfiles/474/gmzwd98.pdf}, author = {John Geanakoplos and Olivia S. Mitchell and Stephen P. Zeldes} } @article {6612, title = {Can Americans Afford to Retire? New Evidence on Retirement Saving Adequacy}, journal = {Journal of Risk and Insurance}, volume = {65}, year = {1998}, note = {RDA 1996-002; HRS 1992}, pages = {371-400}, publisher = {65}, abstract = {This paper looks at the recent research regarding retirement wealth accumulation and decumulation and assesses whether Americans are doing a reasonable job of preparing for retirement, and spending down while in the retirement phase.}, keywords = {Net Worth and Assets, Retirement Planning and Satisfaction}, url = {https://www-jstor-org.proxy.lib.umich.edu/stable/253656?Search=yes\&resultItemClick=true\&searchText=Can\&searchText=Americans\&searchText=Afford\&searchText=to\&searchText=Retire\&searchText=New\&searchText=Evidence\&searchText=on\&searchText=Retirement\&searchText}, author = {Olivia S. Mitchell and James Moore} } @inbook {5145, title = {Effects of Pensions on Household Wealth Accumulation: Implications of the Shift Toward Defined Contribution Plans}, booktitle = {Living With Defined Contribution Pensions}, year = {1998}, note = {ProCite field 6 : In ProCite field 8 : eds.}, publisher = {Univ. of Pennsylvania Press and Pension Research Council}, organization = {Univ. of Pennsylvania Press and Pension Research Council}, abstract = {Pension wealth constitutes a sizable portion of households{\textquoteright} retirement resources. Close to half of civilian nonagricultural workers participate in pension plans.{\textquoteright} Future income flows from private pensions accounted for 20 percent of the wealth of households aged 65-69 in 1991 (Poterba, Venti, and Wise 1994, table 1). Thus the relation between pensions and other household wealth can have important implications for policy issues, such as how to raise the saving rate or assure adequate saving for retirement, as well as for more fundamental issues, such as how people make economic decisions about the future.}, keywords = {Net Worth and Assets, Pensions}, url = {https://pensionresearchcouncil.wharton.upenn.edu/wp-content/uploads/2015/09/0-8122-3439-1-6.pdf}, author = {William G. Gale and Milano, Joseph}, editor = {Olivia S. Mitchell and Scheiber, S.} } @article {5369, title = {The Impact of Pay Inequality, Occupational Segregation, and Lifetime Work Experience on Retirement Income of Women and Minorities}, year = {1998}, note = {RDA}, abstract = {In this study the researchers review data on earnings and search for differences between men and women, as well as, differences between whites and minorities. Specifically, the researchers examine Social Security, employer-provided pensions, and financial assets, like homes. Observations and analysis of the data show that occupational segregation along with pay differences explain the vast majority of the retirement income differences. Most of the pay difference between men and women is in the form of pension size. Many interesting findings are given with possible explanations and ways of fixing the discrepancies. Cross-tabulations are done to show differences between the married and non-married, as well.}, keywords = {Demographics, Housing, Income, Net Worth and Assets, Pensions, Social Security, Women and Minorities}, author = {Olivia S. Mitchell and Phillip B. Levine and John W R Phillips} } @article {5371, title = {International Models for Pension Reform}, number = {WP1998-05}, year = {1998}, institution = {University of Pennsylvania}, keywords = {Methodology, Pensions, Public Policy}, url = {https://repository.upenn.edu/prc_papers/525/}, author = {Olivia S. Mitchell} } @inbook {5176, title = {Privatizing Social Security: First Round Effects of a Generic Voluntary Privatized U.S. Social Security System}, booktitle = {Privatizing Social Security}, year = {1998}, note = {ProCite field 8 : ed.}, pages = {313-57}, publisher = {University of Chicago Press}, organization = {University of Chicago Press}, address = {Chicago, IL}, keywords = {Methodology, Public Policy, Social Security}, author = {Alan L Gustman and Olivia S. Mitchell and Thomas L. Steinmeier}, editor = {Feldstein, M.S.} } @article {NBERw6178, title = {Retirement Wealth Accumulation and Decumulation: New Developments and Outstanding Opportunities}, year = {1998}, institution = {NBER}, abstract = {Analysts have raised questions about current workers{\textquoteright} 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."}, keywords = {Money, Retirement, Retirement wealth, Wealth}, doi = {10.3386/w6178}, url = {http://www.nber.org/papers/w6178}, author = {Olivia S. Mitchell and James Moore} } @article {6596, title = {Building Better Retirement Income Models}, journal = {North American Actuarial Journal}, volume = {1}, year = {1997}, pages = {1-11}, publisher = {1}, abstract = {There is a strong and immediate need to collect more data and to construct better retirement income policy models. In the very near future, changes must be made to the U.S. retirement policy. These changes and the policy itself will only be effective if it is based on strong retirement models. The article describes recent efforts and developments that may interest those concerned with retirement issues. The HRS is praised for its ability to obtain the necessary information on older workers that has for so long been missing from the field of retirement research.}, keywords = {Methodology, Retirement Planning and Satisfaction}, doi = {10.1080/10920277.1997.10595578}, author = {Bone, Christopher M. and Olivia S. Mitchell} } @article {5338, title = {The Competitive Performance of Life Insurance Firms in the Retirement Asset Market}, year = {1997}, institution = {University of Pennsylvania}, abstract = {This paper summarizes the findings of the joint Wharton Financial Institutions Center and KPMG study of the retirement assets market and the role of life insurance companies within it. The study began with the following goals: Investigate how people save for retirement and whether this is adequate. Determine the primary products and institutions of the retirement asset market and observe how these have changed through time. Key findings: For most, asset accumulation is less than adequate for a comfortable retirement. The average worker exhibits little of the needed financial understanding to adequately plan for retirement. Upon retirement, households do not spend down their assets optimally. The retirement asset market is rapidly expanding. Products in retirement portfolios have shifted with time. The market share of mutual funds has exploded, mostly at the expense of depository institutions. Life insurance companies maintain a large, but slipping share.}, keywords = {Insurance}, url = {https://www.researchgate.net/publication/23739464_The_Competitive_Performance_of_Life_Insurance_Firms_in_the_Retirement_Asset_Market}, author = {Chorney, Harris R. and Goldman, Jill and Olivia S. Mitchell and Santomero, Anthony M.} } @article {8647, title = {New Evidence on the Money{\textquoteright}s Worth of Individual Annuities}, number = {6002}, year = {1997}, month = {04/1997}, pages = {1-47}, institution = {National Bureau of Economic Research}, address = {Cambridge, MA}, abstract = {This paper presents new information on the expected present discounted value of payouts on individual life annuities. The annuity we examine is the single premium immediate life annuity, an insurance product that pays out a nominal level sum as long as the covered person lives, in exchange for an initial lump-sum premium. This annuity offers protection against the risk of someone outliving his saving, given uncertainty about longevity. For reasonable estimates of behavioral parameters, we calculate that individual annuities are currently priced so that retirees without bequest motives should find these policies of substantial value in configuring their portfolios to smooth retirement consumption. We also find that the expected present discounted value of payouts, relative to the initial cost of the annuity, has increased over the last decade. These findings bear on the policy debate regarding the role of individual choice and self-reliance in retirement planning.}, keywords = {Annuitization, Economics, Retirement Planning and Satisfaction}, doi = {10.3386/w6002}, url = {http://www.nber.org/papers/w6002.pdf}, author = {Olivia S. Mitchell and James M. Poterba and Mark J. Warshawsky} } @article {5332, title = {Pension and Social Security Wealth in the Health and Retirement Study}, year = {1997}, note = {ProCite field 8 : Dartmouth College and NBER}, institution = {National Bureau of Economic Research}, abstract = {Together, pensions, social security and health insurance account for half of the wealth held by all households in the Health and Retirement Study (HRS), for 60 percent of total wealth of HRS households who are in the 45th to 55th wealth percentiles, and even for 48 percent of wealth for those in the 90th to 95th wealth percentiles. The HRS surveys households aged 51 to 61 in 1992, and obtains pension plan descriptions from respondents{\textquoteright} employers. Pension accrual profiles, income and wealth distributions by type, wealth-income ratios and accrued wealth by pension status are also explored.}, keywords = {Consumption and Savings, Income, Medicare/Medicaid/Health Insurance, Methodology, Net Worth and Assets, Pensions, Retirement Planning and Satisfaction, Social Security}, doi = {10.3386/w5912}, url = {https://www.nber.org/papers/w5912}, author = {Alan L Gustman and Olivia S. Mitchell and Andrew A. Samwick and Thomas L. Steinmeier} } @article {5334, title = {Projected Retirement Wealth and Savings Adequacy in the Health and Retirement Study}, year = {1997}, note = {RDA ProCite field 8 : Wharton School; Wharton School and NBER}, institution = {National Bureau of Economic Research}, abstract = {Low saving rates raise questions about Americans{\textquoteright} 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. The authors assess how much more people would need to save in order to preserve consumption levels after retirement. They 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, their 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 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.}, keywords = {Consumption and Savings, Health Conditions and Status, Net Worth and Assets, Pensions, Retirement Planning and Satisfaction, Social Security}, doi = {10.3386/w6240}, url = {https://www.nber.org/papers/w6240}, author = {James Moore and Olivia S. Mitchell} } @article {6567, title = {Review of: Aging and Old Age}, journal = {Journal of Economic Literature}, volume = {35}, year = {1997}, note = {ProCite field 3 : U of PA}, pages = {159-160}, publisher = {35}, keywords = {Consumption and Savings, Demographics, Health Conditions and Status}, author = {Olivia S. Mitchell} } @article {5351, title = {Construction of the Earnings and Benefits File (EBF) for Use with the Health and Retirement Study}, year = {1996}, institution = {University of Pennsylvania}, abstract = {Analysts using the Health and Retirement Survey (HRS) often require information on earnings, labor market attachment, and social security benefits in order to better understand the factors affecting retirement and well-being at older ages. To this end, several derived variables were constructed and documented in the Earnings and Benefits File (EBF) described here. The EBF provides a set of summary earnings, employment, and social security wealth measures for a subset of HRS respondents in Wave 1 of the survey, for whom administrative records are available. The EBF, a restricted data file, is available from the University of Michigan{\textquoteright}s Institute for Social Research for matching only with versions of the HRS containing geographic detail no finer than the Census Division level. Interested users should contact hrsquest@umich.edu by email for further information on access to the data.}, keywords = {Methodology, Social Security}, author = {Olivia S. Mitchell and Olson, Jan and Thomas L. Steinmeier} } @article {5317, title = {Construction of the Earnings and Benefits File (EBF) for Use With the Health and Retirement Survey}, year = {1996}, note = {ProCite field 8 : U PA and NBER; Social Security Administration; TX Tech U}, institution = {National Bureau of Economic Research}, abstract = {Analysts using the Health and Retirement Survey (HRS) often require information on earnings, labor market attachment, and social security benefits in order to better understand the factors affecting retirement and well-being at older ages. To this end, several derived variables were constructed and documented in the Earnings and Benefits File (EBF) described here. The EBF provides a set of summary earnings, employment, and social security wealth measures for a subset of HRS respondents in Wave 1 of the survey, for whom administration records are available. The EBF, a restricted data file, is available from the University of Michigan{\textquoteright}s Institute for Social Research for matching only with versions of the HRS containing geographic detail no finer than the Census Division level. Interested users should contact hrsquest umich.edu by email for further information on access to the data.}, keywords = {Employment and Labor Force, Income, Methodology, Social Security}, doi = {10.3386/w5707}, author = {Olivia S. Mitchell and Olson, Jan and Thomas L. Steinmeier} } @article {6539, title = {Older Union and Nonunion Workers and their Jobs in the Health and Retirement Survey}, journal = {Proceedings: Industrial Relations Research Association}, volume = {January}, year = {1995}, pages = {44-53}, publisher = {January}, abstract = {This paper compares a variety of factors associated with retirement between those who are covered by a union on their job and those who are not. Despite the well-publicized decline in union coverage and the elimination of opportunities in the union sector, union members approaching retirement age seem to be enjoying the same benefits they would have when unions were stronger. Union membership among this cohort is still 25 for men and almost 20 for women. Results show that these union members have much higher coverage by pensions and health insurance than non-members. These pension plans are likely to be defined benefit plans and therefore are more likely to encourage early retirement, making these holders more likely to expect to retire earlier.}, keywords = {Employment and Labor Force, Retirement Planning and Satisfaction}, author = {Alan L Gustman and Olivia S. Mitchell and Thomas L. Steinmeier} } @article {6535, title = {Retirement Measures in the Health and Retirement Survey}, journal = {The Journal of Human Resources}, volume = {30}, year = {1995}, pages = {S57-S83}, publisher = {30}, abstract = {The HRS offers researchers the opportunity to explore a vast amount of detailed information that will help to answer outstanding questions about retirement. The survey provides new information, based on better measures than have ever been available before, that could help evaluate current programs and improve future policy design. The following areas of the HRS are praised for providing excellent data that will help researchers answer outstanding questions: labor, economic status, health status, family, and disability plan participation. Unique features such as administrative records on earnings and SS benefits and employer-provided data on pensions and health insurance are also described.}, keywords = {Demographics, Retirement Planning and Satisfaction}, author = {Alan L Gustman and Olivia S. Mitchell and Thomas L. Steinmeier} } @article {6525, title = {The Role of Pensions in the Labor Market: A Survey of The Literature}, journal = {Industrial and Labor Relations Review}, volume = {47}, year = {1994}, pages = {417-438}, publisher = {47}, abstract = {This review of recent research on pensions explores how pensions influence employee compensation, retirement, turnover, and other matters central to the determination of labor{\textquoteright}s price and quantity over time. The paper discusses the various reasons why employers offer pension plans, the benefits they get out of them, and the reasons why employees want them. The HRS is mentioned as a footnote to the explanation of the two primary types of benefit plans- - defined contribution (DC) and defined benefit (DB). HRS data indicates that among the 67 of workers who were covered by a pension, 43 were covered by a DB plan only, 29 by a DC plan only, and 26 had a combination of the two.}, keywords = {Employment and Labor Force, Pensions}, doi = {10.1177/001979399404700304}, author = {Alan L Gustman and Olivia S. Mitchell and Thomas L. Steinmeier} }