TY - RPRT T1 - The Long Reach of Education: Health, Wealth, and DI Participation Y1 - 2017 A1 - James M. Poterba A1 - Steven F Venti A1 - David A Wise KW - Education KW - Health Conditions and Status KW - Older Adults KW - Wealth AB - Education is strongly related to participation in the Social Security Disability Insurance (DI) program. To explore this relationship, we describe the correlation between education and DI participation, and then explore how four factors related to education - health, wealth, occupation, and employment - feature in this correlation. We label these four factors “pathway” variables. We find that a large component of the relationship between education and DI participation - more than one-third for men, and over two-thirds for women - can be attributed to the correlation of education with health, and of health with DI receipt. We use data from the Health and Retirement Study for the 1992-2012 period to explore the corresponding roles for each of the pathway variables, and also to study how changes over time in these variables, such as the widening gap between the health status of those with high and low educational attainment, have affected DI participation. JF - NBER Working Paper Series PB - National Bureau of Economic Research CY - Cambridge, MA UR - http://www.nber.org/papers/w23307.pdf ER - TY - RPRT T1 - Longitudinal Determinants of End-of-Life Wealth Inequality Y1 - 2017 A1 - James M. Poterba A1 - Steven F Venti A1 - David A Wise KW - Income inequality KW - Inequality KW - Retirement Planning and Satisfaction AB - This paper examines inequality in end-of-life wealth and the factors that contribute to individuals reaching this life stage with few financial resources. It analyzes repeated cross-sections of the Health and Retirement Study, as well as a small longitudinal sample of individuals observed both at age 65 and shortly before death. Most of those who die with little wealth had little wealth at retirement. There is strong persistence over time in the bottom tail of the wealth distribution, but the probability of having low wealth increases slowly with age after age 65. Those with low lifetime earnings are much more likely to report low wealth at retirement, and to die with little wealth, than their higher-earning contemporaries. The onset of a major medical condition and the loss of a spouse increase in the probability of falling into the low wealth category at advanced ages, although these factors appear to contribute to wealth decline for only a small fraction of those who had modest wealth at age 65 but low wealth at the time of death. JF - NBER Working Paper Series PB - National Bureau of Economic Research CY - Cambridge, MA UR - http://www.nber.org/papers/w23839.pdf ER - TY - CHAP T1 - Disability Insurance Incentives and the Retirement Decision: Evidence from the United States T2 - Social Security Programs and Retirement Around the World: Disability INsurance Programs and Retirement Y1 - 2016 A1 - Courtney Coile ED - David A Wise KW - Employment and Labor Force KW - Insurance KW - Older Adults KW - Public Policy KW - Retirement Planning and Satisfaction AB - Public programs that benefit older individuals, such as Social Security and Medicare, may be changed in the future in ways that reflect an expectation of longer work lives. But do older Americans have the health capacity to work longer? This paper explores this question by asking how much older individuals could work if they worked as much as those with the same mortality rate in the past or as much as their younger counterparts in similar health. Using both methods, we estimate that there is significant additional capacity to work at older ages. We also explore whether there are differences in health capacity across education groups and whether health has improved more over time for the highly educated, using education quartiles to surmount the challenge of changing levels of education over time. JF - Social Security Programs and Retirement Around the World: Disability INsurance Programs and Retirement PB - Chicago University Press CY - Chicago JO - Disability Insurance Incentives and the Retirement Decision: Evidence from the United States ER - TY - RPRT T1 - Social Security and Retirement Programs Around the World: The Capacity to Work at Older Ages - Introduction and Summary Y1 - 2016 A1 - Courtney Coile A1 - Kevin Milligan A1 - David A Wise KW - Disabilities KW - Employment and Labor Force KW - Public Policy KW - Retirement Planning and Satisfaction KW - Social Security AB - This is the introduction and summary to the seventh phase of an ongoing project on Social Security Programs and Retirement Around the World. The project compares the experiences of a dozen developed countries and uses differences in their retirement program provisions to explore the effect of SS on retirement and related questions. The first three phases of this project document that: 1) incentives for retirement from SS are strongly correlated with labor force participation rates across countries; 2) within countries, workers with stronger incentives to delay retirement are more likely to do so; and 3) changes to SS could have substantial effects on labor force participation and government finances. The fourth volume explores whether higher employment among older persons might increase youth unemployment and finds no link between the two. The fifth and sixth volumes focus on the disability insurance (DI) program, finding that changes in DI participation are more closely linked to DI reforms than to changes in health and that reducing access to DI would raise labor supply. This seventh phase of the project explores whether older people are healthy enough to work longer. We use two main methods to estimate the health capacity to work, asking how much older individuals today could work if they worked as much as those with the same mortality rate in the past or as younger individuals in similar health. Both methods suggest there is significant additional health capacity to work at older ages. PB - Cambridge, MA: National Bureau of Economic Research UR - https://www.nber.org/papers/w21939 U4 - Social Security/labor Force Participation/retirement planning/Public Policy/disability insurance ER - TY - JOUR T1 - The long reach of education: Early retirement JF - The Journal of the Economics of Ageing Y1 - 2015 A1 - Steven F Venti A1 - David A Wise KW - disability insurance KW - Education KW - Retirement KW - Social Security AB - The goal of this paper is to draw attention to the long lasting effect of education on economic outcomes. We use the relationship between education and two routes to early retirement – the receipt of Social Security Disability Insurance (DI) and the early claiming of Social Security retirement benefits – to illustrate the long-lasting influence of education. We find that for both men and women with less than a high school degree the median DI participation rate is 6.6 times the participation rate for those with a college degree or more. Similarly, men and women with less than a high school education are over 25 percentage points more likely to claim Social Security benefits early than those with a college degree or more. We focus on four critical “pathways” through which education may indirectly influence early retirement – health, employment, earnings, and the accumulation of assets. We find that for women health is the dominant pathway through which education influences DI participation. For men, the health, earnings, and wealth pathways are of roughly equal magnitude. For both men and women the principal channel through which education influences early Social Security claiming decisions is the earnings pathway. We also consider the direct effect of education that does not operate through these pathways. The direct effect of education is much greater for early claiming of Social Security benefits than for DI participation, accounting for 72% of the effect of education for men and 67% for women. For women the direct effect of education on DI participation is not statistically significant, suggesting that the total effect may be through the four pathways. VL - 6 UR - http://www.sciencedirect.com/science/article/pii/S2212828X15000201 ER - TY - RPRT T1 - What Determines End-of-Life Assets? A Retrospective View Y1 - 2015 A1 - James M. Poterba A1 - Steven F Venti A1 - David A Wise KW - Consumption and Savings KW - Employment and Labor Force KW - Net Worth and Assets KW - Women and Minorities AB - We consider assets when individuals were last observed prior to death in the Health and Retirement Study (HRS) and trace assets backwards to the age when these individuals were first observed. For most individuals, assets in the last year observed (LYO) were very similar to assets in the first year observed (FYO). In particular, most of those who were last observed with very low asset levels also had low assets when first observed. We also estimate the relationship between an individual's asset change between the first and last date of observation, that individual's education and health status when first observed, and that individual's within-sample changes in health and family composition. We obtain estimates for HRS respondents who were 51 to 61 in 1992 and for AHEAD respondents who were age 70 and over in 1993. U4 - Consumption/Saving/Wealth/Economics of the Elderly/Economics of the Handicapped/Non-labor Market Discrimination ER - TY - CHAP T1 - Expectations, Aging and Cognitive Decline T2 - DISCOVERIES IN THE ECONOMICS OF AGING Y1 - 2014 A1 - Kezdi, Gabor A1 - Robert J. Willis A1 - David A Wise KW - Aging KW - Cognitive decline AB - We use longitudinal data from the HRS to document general patterns in expectations with respect to aging in various domains and investigate the potential role of cognitive decline in those patterns. We focus on two aspects of expectations: optimism and uncertainty. We estimate the effect of age controlling for cohort, selection and calendar time effects. With the notable exception of survival expectations, we find that optimism decreases with age in most domains. Uncertainty appears to increase with age in most cases except for survival expectations, but these findings are less robust. Using methods that minimize the likelihood of spurious associations due to survey noise, we show that cognitive decline plays a modest but statistically significant role in explaining the decline of optimism with age, again, with the exception of survival expectations. We do not find a role for cognitive decline in accounting for the increase in uncertainty. JF - DISCOVERIES IN THE ECONOMICS OF AGING PB - University of Chicago Press CY - Chicago, IL SN - 0-226-14609-X UR - https://www.nber.org/books-and-chapters/discoveries-economics-aging/expectations-aging-and-cognitive-decline ER - TY - CHAP T1 - The Lifetime Risk of Nursing Home Use T2 - Discoveries in the Economics of Aging Y1 - 2014 A1 - Michael D Hurd A1 - Pierre-Carl Michaud A1 - Susann Rohwedder ED - David A Wise KW - Health Conditions and Status KW - Healthcare AB - This paper estimates the lifetime risk and distribution of stays in nursing homes using 10 waves of data from the Health and Retirement Study covering the population over the age of 50. Using both non-parametric and parametric approaches which account for censoring, we estimate that a 50 year old has a 53 to 59 chance of ever entering a nursing home before he dies and that, conditional on any stay, the average duration is just over a year. We show that stays at the end of life which are typically not captured in core interviews are very important for assessing lifetime exposure. The HRS performs exit interviews with proxies for those who died. Excluding exit interviews yields lifetime risk under 40 . Being female, white and a non-smoker are associated with higher lifetime risk due to lower (competing) mortality risk and higher nursing home risk at older ages. JF - Discoveries in the Economics of Aging PB - University of Chicago Press CY - Chicago U4 - nursing home rist/nursing homes/mortality JO - The Lifetime Risk of Nursing Home Use ER - TY - CHAP T1 - The Nexus of Social Security Benefits, Health, and Wealth at Death T2 - Discoveries in the Economics of Aging Y1 - 2014 A1 - James M. Poterba A1 - Steven F Venti A1 - David A Wise KW - health KW - Social Security Benefits KW - Wealth AB - Social Security (SS) benefits are the most important component of the income of a large fraction of older Americans. A significant fraction approach later life relying heavily on SS benefits. Persons in poor health in old age have a higher-than-average probability of having experienced low earnings while in the labor force, increasing the risk of having low SS benefits in retirement. While the progressivity of the SS benefit formula provides a safety net to support low-wage workers in retirement, a noticeable fraction still have income below the poverty level in their last years. In general, low assets and low income in old age are strongly related to poor health. We explore this nexus and describe the relationship between SS benefits and the exhaustion of non-annuity assets near the end of life. We examine the relationship between the drawdown of assets between the first year an individual is observed in the AHEAD data (1995) and the last year that individual is observed before death, and that individual's health, SS benefits, and other annuity benefits. SS and defined benefit pension benefits are strongly "protective" of non-annuity assets, with a negative relationship between these income flows and the likelihood of exhausting non-annuity assets. JF - Discoveries in the Economics of Aging PB - University of Chicago Press UR - http://www.nber.org/chapters/c12964 ER - TY - RPRT T1 - Social Security Programs and Retirement Around the World: Disability Insurance Programs and Retirement - Introduction and Summary Y1 - 2014 A1 - Courtney Coile A1 - Kevin Milligan A1 - David A Wise KW - Social Security AB - This is the introduction and summary to the sixth phase of an ongoing project on Social Security Programs and Retirement Around the World. The first phase described the retirement incentives inherent in plan provisions and documented the strong relationship across countries between social security incentives to retire and the proportion of older persons out of the labor force. The second phase documented the large effects that changing plan provisions would have on the labor force participation of older workers. The third phase demonstrated the consequent fiscal implications that extending labor force participation would have on net program costs–reducing government social security benefit payments and increasing government tax revenues. The fourth phase presented analyses of the relationship between the labor force participation of older persons and the labor force participation of younger persons in twelve countries. We found no evidence that increasing the employment of older persons will reduce the employment opportunities of youth and no evidence that increasing the employment of older persons will increase the unemployment of youth. The fifth phase on "Historical Trends in Mortality and Health, Employment, and Disability Insurance Participation and Reforms" was intended to set the stage for this current phase. This sixth phase of the ongoing ISS project is particularly related to the fifth phase (Wise, 2012) and the second phase (Gruber and Wise, 2004) of the project. This volume continues the focus of the previous volume on DI programs while extending the methodology to study retirement behavior used in the second phase to focus in particular on the effects of the DI programs. The key question this volume seeks to address is: given health status, to what extent are differences in labor force participation across countries determined by the provisions of disability insurance programs? PB - NBER UR - http://www.nber.org/papers/w20120 ER - TY - RPRT T1 - Health, Education, and the Post-Retirement Evolution of Household Assets Y1 - 2013 A1 - James M. Poterba A1 - Steven F Venti A1 - David A Wise KW - Demographics KW - Health Conditions and Status KW - Net Worth and Assets KW - Retirement Planning and Satisfaction AB - This paper explores the relationship between education and the evolution of wealth after retirement. Asset growth following retirement depends in part on health capital and financial capital accumulated prior to retirement, which in turn are strongly related to educational attainment. These initial conditions for retirement can have a lingering effect on subsequent asset evolution. Our aim is to disentangle the effects of education on post-retirement asset evolution that operate through health and financial capital accumulated prior to retirement from the effects of education that impinge directly on asset evolution after retirement. We consider the indirect effect of education through financial resources in particular Social Security benefits and defined benefit pension benefits and through health capital that was accumulated before retirement. We also consider the direct effect of education on asset growth following retirement, emphasizing the correlation between education and the returns households earn on their post-retirement investments. Households with different levels of education invest, on average, in different assets, and they may consequently earn different rates of return. Finally, we consider the additional effects of education that are not captured through these pathways. Our empirical findings suggest a substantial association between education and the evolution of assets. For example, for two person households the growth of assets between 1998 and 2008 is on average much greater for college graduates than for those with less than a high school degree. This difference ranges from about 82,000 in the lowest asset quintile to over 600,000 in the highest. PB - Cambridge, MA, National Bureau of Economic Research U4 - education/wealth/asset accumulation/household finances/retirement planning/health capital/health capital ER - TY - RPRT T1 - Were They Prepared for Retirement? Financial Status at Advanced Ages in the HRS and AHEAD Cohorts Y1 - 2012 A1 - James M. Poterba A1 - Steven F Venti A1 - David A Wise KW - Consumption and Savings KW - Employment and Labor Force KW - Event History/Life Cycle KW - Net Worth and Assets KW - Women and Minorities AB - Many analysts have considered whether households approaching retirement age have accumulated enough assets to be well prepared for retirement. In this paper, we shift from studying household finances at the start of the retirement period, an ex ante measure of retirement preparation, to studying the asset holdings of households in their last years of life. The analysis is based on Health and Retirement Study with special attention to Asset and Health Dynamics Among the Oldest Old (AHEAD) cohort that was first surveyed in 1993. We consider the level of assets that households hold in the last survey wave preceding their death. We study how assets at the end of life depend on three family status pathways prior to death--(1) original one-person households in 1993, (2) persons in two-person household in 1993 with a deceased spouse in the last year observed, and (3) persons in two-person households in 1993 with the spouse alive when last observed. We find that a substantial fraction of persons die with virtually no financial assets--46.1 percent with less than 10,000--and many of these households also have no housing wealth and rely almost entirely on Social Security benefits for support. In addition this group is disproportionately in poor health. Based on a replacement rate comparison, many of these households may be deemed to have been well-prepared for retirement, in the sense that their income in their final years was not substantially lower than their income in their late 50s or early 60s. Yet with such low asset levels, they would have little capacity to pay for unanticipated needs such as health expenses or other financial shocks or to pay for entertainment, travel, or other activities. This raises a question of whether the replacement ratio is a sufficient statistic for the adequacy of retirement preparation. PB - National Bureau of Economic Research UR - URL:http://www.nber.org/papers/w17824.pdf URL N1 - National Bureau of Economic Research, Inc, NBER Working Papers: 17824, 2012 0898-2937 Working Paper U4 - Asset accumulation/Personal Finance/Intertemporal Consumer Choice/Life Cycle Models and Saving/Economics of the Elderly/Economics of the Handicapped/Non-labor Market Discrimination ER - TY - CHAP T1 - Cognition and Economic Outcomes T2 - Explorations in the Economics of Aging Y1 - 2011 A1 - John J McArdle A1 - James P Smith A1 - Robert J. Willis ED - David A Wise KW - Health Conditions and Status JF - Explorations in the Economics of Aging PB - University of Chicago Press CY - Chicago U4 - cognition JO - Cognition and Economic Outcomes ER - TY - RPRT T1 - The Composition and Draw-down of Wealth in Retirement Y1 - 2011 A1 - James M. Poterba A1 - Steven F Venti A1 - David A Wise KW - Consumption and Savings KW - Employment and Labor Force KW - Event History/Life Cycle KW - Women and Minorities AB - This paper presents evidence on the resources available to households as they enter retirement. It draws heavily on data collected by the Health and Retirement Study and calculates the potential additional annuity income that households could purchase, given their holdings of non-annuitized financial assets at the start of retirement. Even if households used all of their financial assets inside and outside personal retirement accounts to purchase a life annuity, only 47 percent of households between the ages of 65 and 69 in 2008 could increase their life-contingent income by more than 5,000 per year. At the upper end of the wealth distribution, however, a substantial number of households could make large annuity purchases. The paper also considers the role of housing equity in the portfolios of retirement-age households, and explores the extent to which households draw down housing equity and financial assets as they age. Many households appear to treat housing equity and non-annuitized financial assets as precautionary savings, tending to draw them down only when they experience a shock such as the death of a spouse or a period of substantial medical outlays. Because home equity is often conserved until very late in life, for many households it may provide some insurance against the risk of living longer than expected. JF - NBER Working Paper PB - National Bureau of Economic Research CY - Cambridge, MA U4 - Personal Finance/Intertemporal Consumer Choice/Life Cycle Models and Saving/Economics of the Elderly/Economics of the Handicapped/Non-labor Market Discrimination ER - TY - RPRT T1 - The Asset Cost of Poor Health Y1 - 2010 A1 - James M. Poterba A1 - Steven F Venti A1 - David A Wise KW - Health Conditions and Status KW - Net Worth and Assets AB - This paper examines the correlation between poor health and asset accumulation for households in the first nine waves of the Health and Retirement Survey. Rather than enumerating the specific costs of poor health, such as out of pocket medical expenses or lost earnings, we estimate how the evolution of household assets is related to poor health. We construct a simple measure of health status based on the first principal component of HRS survey responses on self-reported health status, diagnoses, ADLs, IADL, and other indicators of underlying health. Our estimates suggest large and substantively important correlations between poor health and asset accumulation. We compare persons in each 1992 asset quintile who were in the top third of the 1992 distribution of latent health with those in the same 1992 asset quintile who were in the bottom third of the latent health distribution. By 2008, those in the top third of the health distribution had accumulated, on average, more than 50 percent more assets than those in the bottom third of the health distribution. This asset cost of poor health appears to be larger for persons with substantial 1992 asset balances than for those with lower balances. JF - NBER Working Paper PB - National Bureau of Economic Research CY - Cambridge, MA U4 - health Status/Asset accumulation ER - TY - CHAP T1 - Demographic Trends, Housing Equity, and the Financial Security of Future Retirees T2 - Demography and the Economy Y1 - 2010 A1 - James M. Poterba A1 - Steven F Venti A1 - David A Wise KW - Demography KW - Financial security KW - Housing AB - About 80 percent of households with heads at retirement age own a home. Aside from Social Security and dedicated retirement saving, home equity is the primary asset of a large fraction of these homeowners. Thus, the fi nancial security of many older households depends importantly on the value of their homes. Venti and Wise (1990, 2001, 2004); Megbolugbe, Sa- Aadu, and Shilling (1997); and Banks et al. (2010) show that housing equity tends to be withdrawn when households experience shocks to family status like entry to a nursing home or death of a spouse. If, as these analyses suggest, housing equity is conserved for a “rainy day,” then the value of housing can have important implications for the reserve of wealth in the event of such shocks JF - Demography and the Economy PB - University of Chicago Press SN - 0-226-75472-3 UR - http://www.nber.org/chapters/c8416 ER - TY - CHAP T1 - Education and the Prevalence of Pain T2 - Research Findings in the Economics of Aging Y1 - 2010 A1 - Atlas, Steven J. A1 - Jonathan S Skinner ED - David A Wise KW - Demographics KW - Disabilities KW - Healthcare AB - Many Americans report chronic and disabling pain, even in the absence of identifiable clinical disorders. We first examine the prevalence of pain in the older U.S. population using the Health and Retirement Study (HRS). Among 50-59 year females, for example, pain rates ranged from 26 percent for college graduates to 55 percent for those without a high school degree. Occupation, industry, and marital status attenuated but did not erase these educational gradients. Second, we used a study of patients with lower back pain and sciatica arising from intervertebral disk herniation (IDH). Initially, nearly all patients reported considerable pain and discomfort, with a sizeable fraction undergoing surgery for their IDH. However, baseline severity measures and surgical or medical treatment explained little of the variation in 10-year outcomes. By contrast, education exerted a strong impact on changes over time in pain: just 9 percent of college graduates report leg or back pain always or almost always after 10 years, compared to 34 percent for people without a high school degree. This close association of education with pain is consistent with recent research emphasizing the importance of neurological -- and perhaps economic -- factors in the perception of pain. JF - Research Findings in the Economics of Aging T3 - National Bureau of Economic Research conference report PB - University of Chicago Press CY - Chicago U4 - EDUCATION/DISABILITY/DISABILITY/lower back pain/socioeconomic Status JO - Education and the Prevalence of Pain ER - TY - RPRT T1 - Family Status Transitions, Latent Health, and the Post-Retirement Evolution of Assets Y1 - 2010 A1 - James M. Poterba A1 - Steven F Venti A1 - David A Wise KW - Adult children KW - Housing KW - Net Worth and Assets KW - Pensions AB - We consider the evolution of assets after retirement. We ask whether total assets--including housing equity, personal retirement accounts, and other financial assets--tend to be husbanded for a rainy day and drawn down primarily at the time of precipitating shocks, or whether they are drawn down throughout the retirement period. We focus on the relationships between family status transitions, latent health status, and the evolution of assets. Our analysis is based primarily on longitudinal data from the HRS and AHEAD cohorts of the Health and Retirement Study. We find that the evolution of assets is strongly related to family status transitions. For both single individuals and married couples who do not experience a death or divorce, total assets increase well into old age. In contrast, individuals in married couples that experience a family status transition, either a death or a divorce, exhibit much slower asset growth and often experience a large decline in asset values at the time of the transition. In addition, the level and evolution of assets is very strongly related to health, measured by a latent health index. For example, for continuing two-person HRS households between the ages of 56 and 61 in 1992 the ratio of assets of households in the top health quintile to the assets of those in the bottom quintile was 1.7 in 1992. It had increased to 2.2 by the end of 2006. JF - NBER Working Paper PB - National Bureau of Economic Research CY - Cambridge, MA U4 - Asset allocation/housing Equity/personal retirement accounts/family transfers, structure ER - TY - CHAP T1 - Fiscal Effects of Social Security Reform in the United States T2 - Social Security Programs and Retirement around the World Y1 - 2010 A1 - Courtney Coile A1 - Gruber, Jonathan ED - Gruber, Jonathan ED - David A Wise KW - Other KW - Public Policy KW - Social Security JF - Social Security Programs and Retirement around the World T3 - A National Bureau of Economic Research conference report PB - University of Chicago Press CY - Chicago U4 - social security/OASDI/earnings and Benefits File/actuarial reform/common reform/social security wealth JO - Fiscal Effects of Social Security Reform in the United States ER - TY - CHAP T1 - Housing Price Volatility and Downsizing in Later Life T2 - Research Findings in the Economics of Aging Y1 - 2010 A1 - James Banks A1 - Richard Blundell A1 - Oldfield, Zoë A1 - James P Smith ED - David A Wise KW - Consumption and Savings KW - Cross-National KW - Demographics KW - Housing KW - Retirement Planning and Satisfaction AB - In this paper, we modeled several types of housing transitions of the elderly in two countries -- Britain and the United States. One important form of these transitions involves downsizing of housing consumption, the importance of which among older households is still debated. This downsizing takes multiple forms, including reductions in the number of rooms per dwelling and the value of the home. There is also evidence that this downsizing is greater when house price volatility is greater and that American households try to escape housing price volatility by moving to places that are experience significantly less housing price volatility. Our comparative evidence in suggests that there is less evidence of downsizing in Britain. Our results indicate that housing consumption appears to decline with age in the US, even after controlling for the other demographic and work transitions associated with age that would normally produce such a decline. No such fall in housing consumption is found in Britain, largely because British households are much more likely to stay in their original residence. JF - Research Findings in the Economics of Aging PB - University of Chicago Press CY - Chicago U4 - Housing/consumption/cross-national comparison/downsizing/Mobility JO - Housing Price Volatility and Downsizing in Later Life ER - TY - CHAP T1 - Mind the Gap! Consumer Perceptions and Choices of Medicare Part D Prescription Drug Plans T2 - Research Findings in the Economics of Aging Y1 - 2010 A1 - Florian Heiss A1 - Daniel McFadden A1 - Joachim Winter ED - David A Wise KW - End of life decisions KW - Healthcare KW - Medicare/Medicaid/Health Insurance AB - Medicare Part D provides prescription drug coverage through Medicare approved plans offered by private insurance companies and HMOs. In this paper, we study the role of current prescription drug use and health risks, related expectations, and subjective factors in the demand for prescription drug insurance. To characterize rational behavior in the complex Part D environment, we develop an intertemporal optimization model of enrollment decisions. We generally find that seniors' choices respond to the incentives provided by their own health status and the market environment as predicted by the optimization model. The proportion of individuals who do not attain the optimal choice is small, but the margin for error is also small since enrollment is transparently optimal for most eligible seniors. Further, there is also evidence that seniors over-react to some salient features of the choice situation, do not take full account of the future benefit and cost consequences of their decisions, or the expected net benefits and risk properties of alternative plans. JF - Research Findings in the Economics of Aging T3 - The Economics of Aging PB - University of Chicago Press CY - Chicago SN - 0-226-90306-0 UR - https://www.nber.org/books-and-chapters/research-findings-economics-aging/mind-gap-consumer-perceptions-and-choices-medicare-part-d-prescription-drug-plans U4 - Medicare Part D/prescription drug coverage/health insurance/decision Making ER - TY - BOOK T1 - Research findings in the economics of aging T2 - The Economics of Aging Y1 - 2010 A1 - David A Wise KW - Demographics KW - Disabilities KW - Medicare/Medicaid/Health Insurance KW - Net Worth and Assets KW - Pensions AB - The baby boom generation’s entry into old age has led to an unprecedented increase in the elderly population. The social and economic effects of this shift are significant, and in Research Findings in the Economics of Aging, a group of leading researchers takes an eclectic view of the subject. Among the broad topics discussed are work and retirement behavior, disability, and their relationship to the structure of retirement and disability policies. While choices about when to retire are made by individuals, these decisions are influenced by a set of incentives, including retirement benefits and health care, and this volume includes cross-national analyses of the effects of such programs on these decisions. Furthermore, the volume also offers in-depth analysis of the effects of retirement plans, employer contributions, and housing prices on retirement. It explores well-established relationships among economic circumstances, health, and mortality, as well as the effects of poverty and lower levels of economic development on health and life satisfaction. By combining micro and macro evidence, this volume continues a tradition of expanding the research agenda on the economics of aging. JF - The Economics of Aging PB - University of Chicago Press CY - Chicago SN - 0-226-90306-0 UR - https://www.nber.org/books-and-chapters/research-findings-economics-aging N1 - Includes bibliographical references and indexes. U4 - Aging / Economic aspects / Congresses./Older people / Economic conditions / Congresses./Old age pensions / Congresses./Disability retirement / Congresses./Medicare / Congresses. ER - TY - CHAP T1 - Work Disability: The Effects of Demography, Health, and Disability Insurance T2 - Research Findings in the Economics of Aging Y1 - 2010 A1 - Axel Borsch-Supan ED - David A Wise KW - Cross-National KW - Disabilities KW - Employment and Labor Force KW - Social Security JF - Research Findings in the Economics of Aging T3 - National Bureau of Economic Research conference report PB - University of Chicago Press CY - Chicago U4 - disability insurance/workforce/social Security/cross-national comparison JO - Work Disability: The Effects of Demography, Health, and Disability Insurance ER - TY - CHAP T1 - The Effect of Large Capital Gains or Losses on Retirement T2 - Developments in the economics of aging Y1 - 2009 A1 - Michael D Hurd A1 - Reti, Monika A1 - Susann Rohwedder ED - David A Wise KW - Net Worth and Assets KW - Retirement Planning and Satisfaction JF - Developments in the economics of aging PB - University of Chicago Press CY - Chicago SN - 0-226-90335-4 UR - https://www.nber.org/books-and-chapters/developments-economics-aging/effect-large-capital-gains-or-losses-retirement U4 - Early Retirement/Wealth Accumulation/Stock Market ER - TY - CHAP T1 - How Do The Better Educated Do It? Socioeconomic Status And The Ability To Cope With Underlying Impairment T2 - Developments in the economics of aging Y1 - 2009 A1 - David M Cutler A1 - Landrum, Mary Beth A1 - Stewart, Kate A. ED - David A Wise KW - Demographics KW - Disabilities KW - Healthcare AB - Our analysis considers two primary issues. First, we ask how much of this gradient in health is a result of underlying differences in functioning versus the ability to cope with impairments. We show that while the bulk of the difference is a result of underlying functioning—the better off have much less difficulty with these measures even in the absence of help—coping is important as well. The better educated are less likely to have functional disabilities in the first place, and cope with them better when they occur. JF - Developments in the economics of aging T3 - A National Bureau of Economic Research conference report PB - University of Chicago Press CY - Chicago SN - 0-226-90335-4 UR - https://www.nber.org/books-and-chapters/developments-economics-aging/how-do-better-educated-do-it-socioeconomic-status-and-ability-cope-underlying-impairment U4 - socioeconomic Status/DISABILITY/DISABILITY/health outcomes/health gradient ER - TY - CHAP T1 - Reducing Social Security PRA Risk at the Individual Level: Life-Cycle Funds and No-Loss Strategies T2 - Social Security Policy in a Changing Environment Y1 - 2009 A1 - James M. Poterba A1 - Joshua Rauh A1 - Steven F Venti A1 - David A Wise KW - Social Security AB - Retirement savers in a Social Security system with a personal retirement account (PRA) component would face the challenge of deciding how to allocate their PRA portfolios across a broad range of asset classes and across many different financial products. Asset allocation decisions have important consequences for retirement wealth accumulation because they affect the expenses of investing as well as the risk of low returns. The goal of this chapter is to assess the relative risk associated with alternative asset allocation strategies in PRAs. It also offers insight on the consequences of different asset allocation rules in current private-sector defined contribution (DC) plans, such as 401(k) plans. Quantifying the risk associated with JF - Social Security Policy in a Changing Environment PB - University of Chicago Press UR - http://www.nber.org/chapters/c4543 ER - TY - CHAP T1 - The SES Health Gradient On Both Sides Of The Atlantic T2 - Developments in the economics of aging Y1 - 2009 A1 - James Banks A1 - Michael Marmot A1 - Oldfield, Zoë A1 - James P Smith ED - David A Wise KW - Cross-National KW - Healthcare KW - Risk Taking AB - Looking across many diseases, average health among mature men is much worse in America compared to England. Second, there exists a steep negative health gradient for men in both countries where men at the bottom of the economic hierarchy are in much worse health than those at the top. This health gradient exists whether education, income, or financial wealth is used as the marker of one's SES status. These conclusions are maintained even after controlling for a standard set of behavioral risk factors such as smoking, drinking, and obesity and are equally true using either biological measures of disease or individual self-reports. In contrast to these disease based measures, health of American men appears to be superior to the health of English men when self-reported general health status is used. The contradiction most likely stems instead from different thresholds used by Americans and English when evaluating health status on subjective scales. For the same objective health status, Americans are much more likely to say that their health is good than are the English. Finally, feedbacks from new health events to household income are one of the reasons that underlie the strength of the income gradient with health in England. JF - Developments in the economics of aging T3 - A National Bureau of Economic Research conference report PB - University of Chicago Press CY - Chicago UR - https://ssrn.com/abstract=942969 U4 - health outcomes/cross-national comparison/risk Factors/ELSA_ JO - The SES Health Gradient On Both Sides Of The Atlantic ER - TY - CHAP T1 - Pathways to Disability: Predicting Health Trajectories T2 - Health at Older Ages: The Causes and Consequences of Declining Disability Y1 - 2008 A1 - Florian Heiss A1 - Axel Borsch-Supan A1 - Michael D Hurd A1 - David A Wise ED - David M Cutler ED - David A Wise KW - Disabilities KW - Healthcare JF - Health at Older Ages: The Causes and Consequences of Declining Disability SN - 0-226-13231-5 UR - https://www.nber.org/books-and-chapters/health-older-ages-causes-and-consequences-declining-disability-among-elderly/pathways-disability-predicting-health-trajectories U4 - DISABILITY/DISABILITY/health trajectories/health trajectories ER - TY - RPRT T1 - Tapping Assets in Retirement: Which Assets, How, and When? Y1 - 2008 A1 - James M. Poterba A1 - David A Wise A1 - Steven F Venti KW - Assets AB - Just two or three decades ago retirement saving in the United States was based heavily on employer-provided defined benefit plans. Benefits after retirement were typically received in the form of lifetime annuities. Now personal retirement accounts—401(k), IRA, Keogh, and others plans—have become the primary form of saving for retirement. In 2007, private sector defined contribution assets totaled $9.2 trillion and assets in traditional defined benefit programs were $2.4 trillion (ICI 2008). At the time of retirement, the participant has sole control of the accumulated assets in these plans and must determine when to withdraw assets from the plans. To date, assets held in personal retirement accounts have rarely been annuitized. This has raised concern that some participants will draw down assets precipitously and run the danger of outliving their assets. In this paper, we consider the drawdown of assets after retirement, in particular the drawdown of 401(k)-like assets. PB - NBER UR - https://www.researchgate.net/publication/241384656_Tapping_Assets_in_Retirement_Which_Assets_How_and_When ER - TY - CONF T1 - The Changing Landscape of Pensions in the United States T2 - Increasing the Effectiveness of Financial Education and Saving Programs Y1 - 2007 A1 - James M. Poterba A1 - Steven F Venti A1 - David A Wise KW - Pensions AB - The pension landscape in the U.S. has changed dramatically over the past 25 years. Saving through personal retirement accounts has become the principal form of retirement saving. We document the transition from a defined benefit system to a personal account system and show the effect it has had on wealth at retirement. We summarize results from other research we have done to project the growth of retirement assets over the next three decades. Our projections suggest that the advent of personal account saving will increase wealth at retirement for future retirees across the lifetime earnings spectrum. JF - Increasing the Effectiveness of Financial Education and Saving Programs PB - NBER ER - TY - JOUR T1 - DEFINED CONTRIBUTION PLANS, DEFINED BENEFIT PLANS, AND THE ACCUMULATION OF RETIREMENT WEALTH. JF - J Public Econ Y1 - 2007 A1 - James M. Poterba A1 - Joshua Rauh A1 - Steven F Venti A1 - David A Wise AB -

The private pension structure in the United States, once dominated by defined benefit (DB) plans, is currently divided between defined contribution (DC) and DB plans. Wealth accumulation in DC plans depends on the participant's contribution behavior and on financial market returns, while accumulation in DB plans is sensitive to a participant's labor market experience and to plan parameters. This paper simulates the distribution of retirement wealth under representative DB and DC plans. It uses data from the Health and Retirement Study (HRS) to explore how asset returns, earnings histories, and retirement plan characteristics contribute to the variation in retirement wealth outcomes. We simulate DC plan accumulation by randomly assigning individuals a share of wages that they and their employer contribute to the plan. We consider several possible asset allocation strategies, with asset returns drawn from the historical return distribution. Our DB plan simulations draw earnings histories from the HRS, and randomly assign each individual a pension plan drawn from a sample of large private and public defined benefit plans. The simulations yield distributions of both DC and DB wealth at retirement. Average retirement wealth accruals under current DC plans exceed average accruals under private sector DB plans, although DC plans are also more likely to generate very low retirement wealth outcomes. The comparison of current DC plans with more generous public sector DB plans is less definitive, because public sector DB plans are more generous on average than their private sector counterparts.

PB - 91 VL - 91 IS - 10 U1 - http://www.ncbi.nlm.nih.gov/pubmed/21057597?dopt=Abstract U4 - Pensions/Retirement Wealth/defined benefits/defined contribution pension plans ER - TY - RPRT T1 - New Estimates of the Future Path of 401(k) Assets Y1 - 2007 A1 - James M. Poterba A1 - Steven F Venti A1 - David A Wise KW - Wealth AB - Over the past two and a half decades there has been a fundamental change in saving for retirement in the United States, with a rapid shift from employer-managed defined benefit pensions to defined contribution saving plans that are largely controlled by employees. To understand how this change will affect the well-being of future retirees, we project the future growth of assets in self-directed personal retirement plans. We project the 401(k) assets at age 65 for cohorts attaining age 65 between 2000 and 2040. We also project the total value of assets in 401(k) accounts in each year through 2040 and we project the value of 401(k) assets as a percent of GDP over this period. We conclude that cohorts that attain age 65 in future decades will have accumulated much greater retirement saving (in real dollars) than the retirement saving of current retirees. JF - NBER Working Paper PB - The National Bureau of Economic Research CY - Cambridge, MA ER - TY - RPRT T1 - Rise of 401(k) Plans, Lifetime Earnings, and Wealth at Retirement Y1 - 2007 A1 - James M. Poterba A1 - Steven F Venti A1 - David A Wise KW - 401(k) KW - Wealth AB - Saving through private pensions has been an important complement to Social Security in providing for the financial needs of older Americans. In the past twenty five years, however, there has been a dramatic change in private retirement saving. Personal retirement accounts have replaced defined benefit pension plans as the primary means of retirement saving. It is important to understand how this change will affect the wealth of future retirees. The personal retirement account system is not yet mature. A person who retired in 2000, for example, could have contributed to a 401(k) for at most 18 years and the typical 401(k) participant had only contributed for a little over seven years. Nonetheless, current 401(k) assets are quite large. We consider in this paper the implications of rising 401(k) saving through the year 2040. In particular, we emphasize the growth of the sum of Social Security wealth and 401(k) assets for families in each decile of the Social Security wealth distribution. Our projections show a substantial increase between 2000 and 2040 in the sum of these retirement assets in each wealth decile. We also consider the accumulation of 401(k) assets by families in different deciles of the distribution of lifetime earnings. JF - NBER Working Paper PB - The National Bureau of Economic Research CY - Cambridge, MA ER - TY - RPRT T1 - Lifecycle Asset Allocation Strategies and the Distribution of 401(k) Retirement Wealth Y1 - 2006 A1 - James M. Poterba A1 - Joshua Rauh A1 - Steven F Venti A1 - David A Wise KW - Wealth AB - This paper examines how different asset allocation strategies over the course of a worker's career affect the distribution of retirement wealth and the expected utility of wealth at retirement. It considers both rules that allocate a constant portfolio fraction to various assets at all ages, as well as "lifecycle" rules that vary the mix of portfolio assets as the worker ages. The analysis simulates retirement wealth using asset returns that are drawn from the historical return distribution. The results suggest that the distribution of retirement wealth associated with typical lifecycle investment strategies is similar to that from age-invariant asset allocation strategies that set the equity share of the portfolio equal to the average equity share in the lifecycle strategies. There is substantial variation across workers with different characteristics in the expected utility from following different asset allocation strategies. The expected utility associated with different 401(k) asset allocation strategies, and the ranking of these strategies, is very sensitive to three parameters: the expected return on corporate stock, the worker's relative risk aversion, and the amount of non-401(k) wealth that the worker will have available at retirement. At modest levels of risk aversion, or in the presence of substantial non-401(k) wealth at retirement, the historical pattern of stock and bond returns implies that the expected utility of an all-stock investment allocation rule is greater than that from any of the more conservative strategies. Higher risk aversion or lower expected returns on stocks raise the expected utility of following lifecycle strategies or other strategies that reduce equity exposure throughout the lifetime. JF - NBER Working Paper PB - The National Bureau of Economic Research CY - Washington, D.C. ER - TY - CHAP T1 - Comment: Broken Down by Work and Sex: How Our Health Declines T2 - Analyses in the Economics of Aging Y1 - 2005 A1 - Daniel McFadden ED - David A Wise KW - Health Conditions and Status KW - Other AB - Commentary on the Case and Deaton chapter, Broken Down by Work and Sex: How Our Health Declines, Using AHEAD data for comparison. JF - Analyses in the Economics of Aging PB - University of Chicago Press 2005 CY - Chicago N1 - ProCite field 6 : In ProCite field 8 : ed. U4 - Health Status/Subjective JO - Comment: Broken Down by Work and Sex: How Our Health Declines ER - TY - CHAP T1 - Consequences and Predictors of New Health Events T2 - Analyses in the Economics of Aging Y1 - 2005 A1 - James P Smith ED - David A Wise KW - Demographics KW - Health Conditions and Status AB - The emphasis in health research has been on understanding and disentangling the multiple ways in which socio-economic status may influence a variety of health outcomes. Consequently, much less is currently known about the impact health may have on SES. But at least for working-aged individuals, health feedbacks to labor supply, household income, and wealth may be quantitatively quite important. Therefore, one aim of this paper will be to estimate the effect of new health events on a series of subsequent outcomes that are both directly and indirectly related to SES. These outcomes will include out-of-pocket medical expenses, the intensive and extensive margins of labor supply, health insurance, and household income. JF - Analyses in the Economics of Aging PB - University of Chicago Press CY - Chicago UR - http://www.ifs.org.uk/publications.php N1 - ProCite field 6 : In ProCite field 8 : ed U4 - Health/Socioeconomic Status JO - Consequences and Predictors of New Health Events ER - TY - CHAP T1 - Discussion of James Poterba, Joshua Rauh, Steven Venti and David Wise, Utility Evaluation of Risk in Retirement Savings Accounts T2 - Analyses in the Economics of Aging Y1 - 2005 A1 - Robert J. Willis ED - David A Wise KW - Net Worth and Assets KW - Public Policy KW - Retirement Planning and Satisfaction KW - Risk Taking JF - Analyses in the Economics of Aging PB - University of Chicago Press CY - Chicago U4 - retirement Planning/pension Wealth/risk Aversion/Stock Market/Public Policy JO - Discussion of James Poterba, Joshua Rauh, Steven Venti and David Wise, Utility Evaluation of Risk in Retirement Savings Accounts ER - TY - CHAP T1 - Discussion of Li Gan, Michael Hurd and Daniel McFadden, Individual Subjective Survival Curves T2 - Analyses in the Economics of Aging Y1 - 2005 A1 - Robert J. Willis ED - David A Wise KW - Expectations KW - Methodology JF - Analyses in the Economics of Aging T3 - NBER conference report PB - University of Chicago Press CY - Chicago U4 - methodology/data Quality/survey response/subjective Probabilities JO - Discussion of Li Gan, Michael Hurd and Daniel McFadden, Individual Subjective Survival Curves ER - TY - CHAP T1 - Healthy, Wealthy, and Knowing Where to Live: Trajectories of Health, Wealth, and Living Arrangements among the Oldest Old T2 - Analyses in the Economics of Aging Y1 - 2005 A1 - Florian Heiss A1 - Michael D Hurd A1 - Axel Borsch-Supan ED - David A Wise KW - Consumption and Savings KW - Health Conditions and Status KW - Net Worth and Assets AB - There are many mechanisms that suggest that living arrangements and well-being derived from health and economic status are closely related. This paper investigates the joint evolution of the three conditions, using a microeconometric approach similar to what is known as vector autoregressions (VAR) in the macroeconomics literature. JF - Analyses in the Economics of Aging PB - University of Chicago Press CY - Chicago N1 - ProCite field 6 : In ProCite field 8 : ed. U4 - Health Status/Wealth/Living Standards JO - Healthy, Wealthy, and Knowing Where to Live: Trajectories of Health, Wealth, and Living Arrangements among the Oldest Old ER - TY - CHAP T1 - Individual Subjective Survival Curves T2 - Analyses in the Economics of Aging Y1 - 2005 A1 - Gan, Li A1 - Michael D Hurd A1 - Daniel McFadden ED - David A Wise KW - Expectations AB - Testing life-cycle models and other economic models of saving and consumption at micro level requires knowledge of individuals' subjective believes of their mortality risk. Previous studies have shown that individual responses on subjective survival probabilities are generally consistent with life tables. However, survey responses suffer serious problems caused by focal responses of zero and one. This paper suggests using a Bayesian update model that accounts for the problems encountered in focal responses. We also propose models that help us to identify how much each individual deviates from life table in her subjective belief. The resulting individual subjective survival curves have considerable variations and are readily applicable in testing economic models that require individual subjective life expectancies. JF - Analyses in the Economics of Aging PB - University of Chicago Press CY - Chicago UR - https://www.nber.org/chapters/c10367 N1 - RDA ProCite field 6 : In ProCite field 8 : ed. U4 - Subjective Probabilities of Survival ER - TY - CHAP T1 - Institutions and Saving for Retirement: Comparing the United States, Italy, and the Netherlands T2 - Analyses in the Economics of Aging Y1 - 2005 A1 - Arie Kapteyn A1 - Panis, Constantijn ED - David A Wise KW - Consumption and Savings KW - Methodology AB - This paper analyzes retirement saving and portfolio choice in the United States, Italy, and the Netherlands. In addition to relying on public retirement provisions, households prepare for retirement through tax-sheltered and after-tax savings. They may invest these funds in a wide variety of assets, including housing, stocks, bonds, savings accounts, and so on. These asset types differ in their risk, return, and liquidity characteristics as well as in their fiscal treatment. Economic theory postulates that housholds allocate their portfolios according to their risk aversion, time horizon, uncertain out-of-pocket medical expenditures, income risk, informal (family) risk-sharing arrangements, and more. While the literature has tested various parts of the theory, both testing and quantification of the theory are hampered by the fact that some of the major variables do not exhibit sufficient variation within a country to establish their relative importance for portfolio choice, or, more generally, for retirement saving and investment. This paper partially fills that gap by exploring three countries with widely varying institutional arrangements for retirement income. JF - Analyses in the Economics of Aging PB - University of Chicago Press CY - Chicago UR - https://www.nber.org/chapters/c10364 N1 - ProCite field 6 : In ProCite field 8 : ed. U4 - Cross Cultural Comparison/Retirement Saving ER - TY - CHAP T1 - Utility Evaluation of Risk in Retirement Saving Accounts T2 - Analyses in the Economics of Aging Y1 - 2005 A1 - James M. Poterba A1 - Joshua Rauh A1 - Steven F Venti A1 - David A Wise ED - David A Wise KW - Net Worth and Assets KW - Retirement Planning and Satisfaction AB - The shift from defined benefit to defined contribution plans in the United States has drawn new attention to the effect of participants' asset allocation decisions on their financial resources for retirement. This paper develops a stochastic simulation algorithm to evaluate the effect of holding a broadly diversified portfolio of common stocks, or a portfolio of index bonds, on the distribution of 401(k) account balances at retirement. We compare the alternative distributions of retirement wealth both by showing the empirical distribution of potential wealth values, and by computing the expected utility of these outcomes under standard assumptions about the structure of household preferences. Our analysis highlights the critical role of other sources of wealth, such as Social Security, defined benefit pension annuities, and saving outside retirement plans in determining the expected utility cost of holding equities in the retirement account. Our findings also demonstrate the importance of the equity premium in affecting investors' utility from different retirement asset allocations. Viewed from the beginning of a working career, and given the historical pattern of returns on stocks and bonds, a household that does not have extremely high risk aversion would achieve a higher expected utility by holding a portfolio of stocks rather than bonds. JF - Analyses in the Economics of Aging PB - University of Chicago Press CY - Chicago N1 - RDA ProCite field 6 : In ProCite field 8 : ed U4 - Assets/Retirement Planning/Retirement Wealth JO - Utility Evaluation of Risk in Retirement Saving Accounts ER - TY - CHAP T1 - Aging and Housing Equity: Another Look T2 - Perspectives on the Economics of Aging Y1 - 2004 A1 - Steven F Venti A1 - David A Wise ED - David A Wise KW - Adult children KW - Housing KW - Net Worth and Assets AB - Prior research has shown that except for Social Security and employer-provided pension assets, housing equity is the most important asset of a large fraction of older Americans. These assets are the primary source of retirement consumption. This paper looks at the change in the home equity of older families as they age. The two ways for households to change home equity are by discontinuing home ownership- an action that seems to be fairly unlikely- or by selling and moving to another home. Findings suggest that housing equity increases with age until about age 75 and then declines slightly as households grow older. In general, home equity should not be counted on to support general non-housing consumption needs as households grow older. JF - Perspectives on the Economics of Aging PB - University of Chicago Press CY - Chicago UR - http://www.nber.org/papers/w8608 N1 - ProCite field 6 : In ProCite field 8 : ed. U4 - Home Ownership/Family Structure/Housing Equity/Economic Status JO - Aging and Housing Equity: Another Look ER - TY - CHAP T1 - The Effect of Social Security on Retirement in the United States T2 - Social Security Programs and Retirement Around the World Y1 - 2004 A1 - Courtney Coile A1 - Gruber, Jonathan ED - Gruber, Jonathan ED - David A Wise KW - Methodology KW - Retirement Planning and Satisfaction JF - Social Security Programs and Retirement Around the World PB - University of Chicago Press CY - Chicago, IL N1 - ProCite field 6 : In ProCite field 8 : eds. U4 - Retirement Policies/Social Security Research JO - The Effect of Social Security on Retirement in the United States ER - TY - CHAP T1 - The Transition to Personal Retirement Accounts and Increasing Retirement Wealth T2 - Perspectives on the Economics of Aging Y1 - 2004 A1 - James M. Poterba A1 - Steven F Venti A1 - David A Wise ED - David A Wise KW - Net Worth and Assets KW - Pensions AB - Retirement saving has changed dramatically over the last two decades. There has been a shift from employer-managed defined benefit pensions to defined contribution retirement saving plans that are largely controlled by employees. In 1980, 92 percent of private retirement saving contributions were to employer-based plans and 64 percent of these contributions were to defined benefit plans. Today, about 85 percent of private contributions are to plans in which individuals decide how much to contribute to the plan, how to invest plan assets and how and when to withdraw money from the plan. In this paper we use both macro and micro data to describe the change in retirement assets and in retirement saving. We give particular attention to the possible substitution of pension assets in one plan for assets in another plan such as the substitution of 401(k) assets for defined benefit plan assets. Aggregate data show that between 1975 and 1999 assets to support retirement increased about five-fold relative to wage and salary income. This increase suggests large increases in the wealth of future retirees. The enormous increase in defined contribution plan assets dwarfed any potential displacement of defined benefit plan assets. In addition, in recent years the annual 'retirement plan contribution rate,' defined as retirement plan contributions as a percentage of NIPA personal income, has been over 5 percent. This is much higher than the NIPA total personal saving rate, which has been close to zero. Retirement saving as a share of personal income today would likely be at least one percentage point greater had it not been for legislation in the 1980s that limited employer contributions to defined benefit pension plans, and the reduction in defined benefit plan contributions associated with the rising stock market of the 1990s. It is also likely that the 'retirement plan contribution rate' would be much higher today if it were not for the 1986 retrenchment of the IRA program. Rising retirement plan contributions, as well as favorable rates of return on retirement plan assets in the 1990s, explain the large increase in these assets relative to income. Employee retirement saving under a defined contribution plan is easily measured and quite JF - Perspectives on the Economics of Aging PB - University of Chicago Press CY - Chicago, IL N1 - ProCite field 6 : In ProCite field 8 : ed. U4 - Retirement Wealth/defined contribution pension plans ER - TY - BOOK T1 - Labor markets and firm benefit policies in Japan and the United States Y1 - 2003 A1 - Seiritsu Ogura A1 - Toshiaki Tachibanaki A1 - David A Wise KW - Employment and Labor Force KW - Medicare/Medicaid/Health Insurance KW - Public Policy KW - Time Use AB - Thirteen papers, presented at a joint conference of the Japan Center for Economic Research and the National Bureau of Economic Research held in Hawaii in January 2000, study employment policies in Japan and the United States and relate recent economic and demographic changes in each country to employment practices and labor market trends. Papers discuss the rise of the United States to peak capitalist economy; the recent transformation of participatory employment practices in Japan; determinants of the shadow value of simultaneous information sharing in the Japanese machine tool manufacturing industry; youth employment in an aging Japanese society; total labor costs and the employment adjustment behavior of large Japanese firms; individual expenditures and medical saving accounts; three types of private coverage supplementing public insurance and their implications for medical care systems; option value estimation with Health and Retirement Study data; why the Japanese spend so much on drugs; the demand for health checkups under uncertainty; the role of firms in welfare provision; fringe benefit provision for female part time workers in Japan; and unions, the costs of job loss, and vacation. Ogura is at the Japan Center for Economic Research. Tachibanaki is at the Institute for Economic Research at Kyoto University. Wise is with the John F. Kennedy School of Government at Harvard University. Author and subject indexes. PB - University of Chicago Press CY - Chicago SN - 0-226-62094-8 UR - https://www.nber.org/books/ogura03-1 U4 - Wages/Labor Force/Time Allocation/Work Behavior/Union Status/Employment/Health Insurance/Public Policy ER - TY - CHAP T1 - Option Value Estimation with HRS Data T2 - Labor Markets and Firm Benefit Policies in Japan and the United States Y1 - 2003 A1 - Andrew A. Samwick A1 - David A Wise ED - Seiritsu Ogura ED - Toshiaki Tachibanaki ED - David A Wise KW - Public Policy KW - Retirement Planning and Satisfaction AB - We estimate the effect of financial incentives to delay retirement on the probability of retirement in the Health and Retirement Study. We find statistically significant effects of both pension wealth and pension incentives on the probability of retirement. The effects are more robust when retirement is defined only as a job separation rather than a complete transition out of the labor force. We also investigate possible interactions between the effects of health, wealth, and health insurance on retirement. JF - Labor Markets and Firm Benefit Policies in Japan and the United States PB - University of Chicago Press CY - Chicago SN - 0-226-62094-8 UR - https://www.nber.org/chapters/c10308 N1 - RDA 1997-011 ProCite field 8 : eds. U4 - financial incentives/retirement behavior/Partial Retirement/retirement planning ER - TY - CHAP T1 - Aging and Housing Equity T2 - Innovations in Retirement Financing Y1 - 2002 A1 - Steven F Venti A1 - David A Wise ED - Zvi Bodie ED - P. Brett Hammond ED - Olivia S. Mitchell ED - Stephen P. Zeldes KW - Housing JF - Innovations in Retirement Financing PB - University of Pennsylvania Press/Pension Research Council CY - Philadephia, PA UR - http://www.nber.org/papers/w7882 N1 - ProCite field 6 : In ProCite field 8 : eds. U4 - Housing Equity JO - Aging and Housing Equity ER - TY - CHAP T1 - Anticipated and Actual Bequests T2 - Themes in the Economics of Aging Y1 - 2001 A1 - Michael D Hurd A1 - James P Smith ED - David A Wise KW - Adult children KW - Consumption and Savings KW - Demographics KW - Event History/Life Cycle KW - Health Conditions and Status AB - This paper uses data on anticipated bequests from two waves of the Health and Retirement Study and the Asset and Health Dynamics of the Oldest Old (AHEAD), and on actual bequests from AHEAD. Actual bequests were measured in exit interviews given by proxy respondents for 774 AHEAD respondents who died between waves 1 and 2. Because the exit interview is representative of the elderly population, the distribution of estate values is quite different from that obtained from estate records, which represent just a wealthy subset of the population. Anticipated bequests were measured by the subjective probability of leaving bequests. Between waves 1 and 2, increases in bequest probabilities were associated with increases in the subjective probability of surviving, increments in household wealth, and widowing while out-of-pocket medical expenses reduced the likelihood of a bequest. By comparing bequest probabilities with baseline wealth we were able to test a main prediction of the life-cycle model, that individuals will dissave at advanced old-age. The AHEAD respondents anticipate substantial dissaving before they die. JF - Themes in the Economics of Aging PB - University of Chicago Press CY - Chicago, IL UR - http://www.nber.org N1 - ProCite field 6 : In ProCite field 8 : ed. U4 - Altruism/Intertemporal Consumer Choice/Life Cycle Models and Saving/Health Production--Nutrition, Mortality, Morbidity, Disability, and Economic Behavior/Economics of the Elderly/Bequests/Elderly/Life Cycle Models/Dissaving/Estate Values/Health JO - Anticipated and Actual Bequests ER - TY - CHAP T1 - Are the Elderly Really Over-Annuitized? New Evidence on Life Insurance and Bequests T2 - Themes in the Economics of Aging Y1 - 2001 A1 - Brown, Jeffrey R. ED - David A Wise KW - Adult children KW - Demographics KW - Insurance KW - Net Worth and Assets AB - This paper assesses the validity of the claim that elderly individuals with strong bequest motives purchase term life insurance to offset mandatory annuitization by the Social Security System. The annuity offset model is re-examined using better, more recent data. Results demonstrate that the elderly do not hold life insurance to offset mandated annuitization. All four of the major implications of the annuity offset model fail empirical testing. The model does not explain life insurance behavior of elderly households and the fact that many elderly households own term life insurance is not a sufficient reason to argue against mandatory annuitization of retirement resources. Further research is being conducted using the AHEAD data in order to find other explanations for why the elderly hold life insurance. JF - Themes in the Economics of Aging PB - University of Chicago Press CY - Chicago UR - http://www.nber.org/papers/w7193 N1 - ProCite field 6 : In ProCite field 8 : ed. U4 - Life Insurance Coverage/Economic Status/Bequest Motives/Basic Demographics JO - Are the Elderly Really Over-Annuitized? New Evidence on Life Insurance and Bequests ER - TY - CHAP T1 - Choice, Chance, and Wealth Dispersion at Retirement T2 - Aging Issues in the United States and Japan Y1 - 2001 A1 - Steven F Venti A1 - David A Wise ED - Seiritsu Ogura ED - Toshiaki Tachibanaki ED - David A Wise KW - Net Worth and Assets KW - Retirement Planning and Satisfaction JF - Aging Issues in the United States and Japan PB - University of Chicago Press CY - Chicago N1 - RDA 1999-002 ProCite field 8 : eds. U4 - Retirement Planning/Retirement Behavior/Wealth ER - TY - CHAP T1 - Predictors of Mortality among the Elderly T2 - Themes in the Economics of Aging Y1 - 2001 A1 - Michael D Hurd A1 - Daniel McFadden A1 - Merrill, Angela ED - David A Wise KW - Demographics KW - Expectations KW - Health Conditions and Status KW - Net Worth and Assets AB - This paper examines the quantitative importance of some predictors of mortality among the population aged 70 and over. As expected, this research confirms that socioeconomic status is related to mortality. This relationship is strong at younger ages and appears to weaken as the cohort gets older. The 13 health indicators are also strong predictors of mortality. Results also show that subjective probabilities of survival predict mortality and remain strong predictors even after controlling for socioeconomic indicators and health conditions. JF - Themes in the Economics of Aging PB - Univ. of Chicago Press CY - Chicago UR - https://www.nber.org/papers/w7440 N1 - ProCite field 8 : ed. U4 - Basic Demographics/Economic Status/Health Status/Subjective Probabilities of Survival/Mortality Rates between waves 1 and 2 of the AHEAD JO - Predictors of Mortality among the Elderly ER - TY - CHAP T1 - Preretirement Cashouts and Foregone Retirement Saving: Implications for 401(k) Asset Accumulation T2 - Themes in the Economics of Aging Y1 - 2001 A1 - James M. Poterba A1 - Steven F Venti A1 - David A Wise ED - David A Wise KW - Consumption and Savings KW - Net Worth and Assets KW - Pensions JF - Themes in the Economics of Aging PB - University of Chicago Press CY - Chicago, IL UR - https://www.nber.org/chapters/c10320 N1 - RDA 1999-002 Wise ProCite field 6 : In ProCite field 8 : ed U4 - 401(k) participation and balances/Retirement Saving/Distribution JO - Preretirement Cashouts and Foregone Retirement Saving: Implications for 401(k) Asset Accumulation ER - TY - CHAP T1 - Social Security Incentives for Retirement T2 - Themes in the Economics of Aging Y1 - 2001 A1 - Courtney Coile A1 - Gruber, Jonathan ED - David A Wise KW - Demographics KW - Employment and Labor Force KW - Net Worth and Assets KW - Retirement Planning and Satisfaction AB - The 'tax effect' is one of the effects used to explain the rapid decline in the labor force participation of older men over age 62. This paper provides a thorough investigation of this 'tax effect' by studying it along four different dimensions. Using HRS data, the impact of SS retirement incentives are considered and the distribution of the incentives across the population is assessed. The paper then examines the role of private pensions and the importance of considering retirement incentives in the next year vs. considering incentives for all possible years. JF - Themes in the Economics of Aging PB - Univ. of Chicago Press CY - Chicago UR - https://www.nber.org/papers/w7651 N1 - ProCite field 8 : ed. U4 - Economic Status/Labor Force Participation/Basic Demographics/Retirement Incentives ER - TY - JOUR T1 - Saver Behavior and 401(k) Retirement Wealth JF - American Economic Review Y1 - 2000 A1 - James M. Poterba A1 - Steven F Venti A1 - David A Wise KW - Consumption and Savings KW - Net Worth and Assets KW - Pensions KW - Retirement Planning and Satisfaction KW - Social Security AB - Contributions to 401(k) plans are now the most important form of retirement saving. Since 401(k) plans were introduced in the early 1980's, they have expanded rapidly and continuously. By 1998, roughly half of all households were eligible to participate in 401(k) plans, and more than 36 million workers made contributions to these employer-provided saving plans. In 1995, the last year for which the U.S. Department of Labor has released definitive data, 401(k) contribu- tions amounted to $87.4 billion, or 55 percent of all contributions to employer-sponsored pension plans. The level of contributions, and their share of all pension contributions, is probably signifi- cantly higher today. The spread of 401(k) plans is the most important indicator of the move to personal retirement saving. In 1980, almost 92 percent of pension-plan contributions were to tradi- tional employer-provided plans, and about 64 percent of these contributions were to conventional defined-benefit plans. Today, almost 60 percent of contributions are to personal retirement accounts, including 401(k), IRA, and Keogh plans. Including employer- provided, non-40 1 (k) defined-contribution plans, over 76 percent of contributions are to plans that are controlled in large measure by individuals. These individuals make partici- pation, contribution, asset-allocation, and withdrawal decisions. In this paper, we describe the likely impor- tance of 401(k) assets for future older Ameri- cans and the effect of investment decisions on asset accumulation. We also examine the extent to which retirement assets may be affected by several decisions: preretirement withdrawals, management fees and expenses, contribution rates, and early retirement. Our analysis focuses on 401(k) saving, but applies more broadly to other forms of individual retirement saving. PB - 90 VL - 90 UR - https://www.jstor.org/stable/117239?seq=1 IS - 2 N1 - RDA 1999-002 U4 - 401(k) participation and balances/Retirement Wealth/Consumer Economics/Retirement Policies/Social Security and Public Pensions ER - TY - CHAP T1 - Lifetime Earnings, Saving Choices, and Wealth at Retirement T2 - Wealth, work, and health: Innovations in measurement in the social sciences: Essays in honor of F. Thomas Juster Y1 - 1999 A1 - Steven F Venti A1 - David A Wise ED - James P Smith ED - Robert J. Willis KW - Consumption and Savings KW - Event History/Life Cycle KW - Methodology KW - Net Worth and Assets KW - Retirement Planning and Satisfaction JF - Wealth, work, and health: Innovations in measurement in the social sciences: Essays in honor of F. Thomas Juster PB - University of Michigan Press CY - Ann Arbor, MI N1 - RDA 1999-002 WiseProCite field[8]: eds U4 - Retirement Planning/Retirement Behavior/Savings/Wealth/Microeconomic Data Management/Consumer Economics: Empirical Analysis/Consumer Economics: Empirical Analysis/Intertemporal Consumer/Life Cycle Models and Saving/Retirement/Retirement Policies JO - Lifetime Earnings, Saving Choices, and Wealth at Retirement ER - TY - JOUR T1 - 401(k) Plans and future patterns of retirement saving JF - American Economic Review Y1 - 1998 A1 - James M. Poterba A1 - Steven F Venti A1 - David A Wise KW - Employment and Labor Force KW - Net Worth and Assets KW - Pensions KW - Retirement Planning and Satisfaction AB - This paper summarizes current participation and contribution patterns in 401(k) plans and projects 401(k) balances at retirement age for workers currently between the ages of 30 and 40. The various factors that will influence future 401(k) balances are discussed. The projections based on HRS data suggest that 401(k) plans are likely to play a significant role in providing for the retirement income of future retirees. PB - 88 VL - 88 UR - https://www.jstor.org/stable/116915?seq=1 IS - 2 N1 - RDA 1999-002 U4 - Economic Status--net worth, earnings history/Labor/401(k) participation and balances/Retirement Planning ER - TY - CHAP T1 - Caring for the Elderly: The Role of Adult Children T2 - Inquiries in the economics of aging Y1 - 1998 A1 - Kathleen McGarry ED - David A Wise KW - Adult children KW - Consumption and Savings KW - Demographics KW - Healthcare KW - Methodology JF - Inquiries in the economics of aging T3 - NBER Project Report series PB - University of Chicago Press CY - Chicago and London UR - https://www.nber.org/chapters/c7084.pdf N1 - ProCite field[3]: UCLA and NBERProCite field[8]: ed. U4 - Caregiver Status/Adult Children/Economics of the Elderly/Analysis of Health Care Markets/Marriage/Marital Dissolution/Family Structure/Elderly JO - Caring for the Elderly: The Role of Adult Children ER - TY - JOUR T1 - The Cause of Wealth Dispersion at Retirement: Choice or Chance? JF - American Economic Review Y1 - 1998 A1 - Steven F Venti A1 - David A Wise KW - Income KW - Net Worth and Assets KW - Retirement Planning and Satisfaction PB - 88 VL - 88 UR - https://www.jstor.org/stable/116916?seq=1 IS - 2 N1 - RDA 1999-002 ProCite field 3 : Dartmouth College; NBER U4 - Personal Income and Wealth Distribution/Retirement/Retirement Policies/Retirement/Wealth ER - TY - CHAP T1 - Consumption and Saving Balances of the Elderly: Experimental Evidence on Survey Response Bias T2 - Frontiers in the Economics of Aging Y1 - 1998 A1 - Michael D Hurd A1 - Daniel McFadden A1 - Chand, Harish A1 - Gan, Li A1 - Merrill, Angela A1 - Michael Ewing Roberts ED - David A Wise KW - Consumption and Savings KW - Methodology AB - A prerequisite for understanding the economic behavior of the elderly, and the impacts of public policy on their health and well-being, is accurate data on key economic variables such as income, consumption, and assets, as well as on expectations regarding future economic and demographic events such as major health costs, disabilities, and death. Standard practice is to elicit such information in economic surveys, relying on respondents’ statements regarding the variables in question. Economists are generally aware that stated responses are noisy. Item nonresponse is a common problem, and carefully done surveys are designed to minimize it. Well-designed analyses of economic survey data are careful about detecting implausible outliers, imputing missing values, and correcting for selection caused by dropping missing observations. Circumstances are recognized that tend to produce systematic biases in response, such as telescoping in recall of past events that arises from the psychophysical perception of time intervals, or overstatement of charitable contributions that arises from the incentive to project a positive self-image. Nevertheless, economic studies are often too sanguine about the reliability of subjects’ statements regarding objective economic data. JF - Frontiers in the Economics of Aging PB - Univ. of Chicago Press CY - Chicago UR - https://www.nber.org/chapters/c7306 N1 - ProCite field 8 : ed. U4 - Consumption/Savings/Survey Methods JO - Consumption and Saving Balances of the Elderly: Experimental Evidence on Survey Response Bias ER - TY - CHAP T1 - Health Events, Health Insurance and Labor Supply: Evidence from the Health and Retirement Survey T2 - Frontiers in the Economics of Aging Y1 - 1998 A1 - Mark McClellan ED - David A Wise KW - Employment and Labor Force KW - Health Conditions and Status KW - Medicare/Medicaid/Health Insurance AB - The economic consequences of health problems are reported to be enormous. For example, many investigators have concluded that the cost to society of common health problems such as heart disease, diabetes, and cancer is many billions of dollars per year in terms of lost work productivity, intensive medical treatments, and additional supportive care. However, these estimates have several important limitations. Few data sets have incorporated detailed information on health problems and economic circumstances such as retirement, medical and personal care expenditures, income, and wealth. Consequently, most existing studies have had to combine data from different sources, possibly missing important correlations between variables such as insurance availability and the occurrence of health problems. Many of these studies have been based on cross-sectional, descriptive comparisons of individuals with and without health problems. As a result, it is difficult to account for other differences besides health problems that might also have affected these outcomes. For example, individuals with health problems may have had chronically worse health status, or have lower-income backgrounds, or have other differences in preferences that might have led to differences in economic outcomes anyway. JF - Frontiers in the Economics of Aging PB - Univ. of Chicago Press CY - Chicago, IL UR - https://www.nber.org/chapters/c7304 N1 - ProCite field 6 : In ProCite field 8 : ed. U4 - Health Status/Labor Supply/Health Insurance JO - Health Events, Health Insurance and Labor Supply: Evidence from the Health and Retirement Survey ER - TY - CHAP T1 - Household Wealth of the Elderly under Alternative Imputation Procedures T2 - Inquiries in the economics of aging Y1 - 1998 A1 - Hoynes, Hilary A1 - Michael D Hurd A1 - Chand, Harish ED - David A Wise KW - Consumption and Savings KW - Demographics KW - Income KW - Net Worth and Assets KW - Retirement Planning and Satisfaction AB - Although many reach retirement with few resources except housing equity and a claim to social security and Medicare, financial wealth, nonetheless, makes an important contribution to the economic status of many of the elderly. Most of our up-to-date information about the wealth of the elderly is based on the Survey of Income and Program Participation (SIPP), which sometimes adds an asset module to its core survey. As in many surveys of assets, the rate of missing data on individual asset items is high, about 30 to 40 percent among those with the asset. This raises the issue of the reliability of SIPP wealth measures because respondents who refuse or are unable to give a value to an asset item may not be representative of the population. Indeed, in the Health and Retirement Survey (HRS) it is clear that asset data are not missing at random. Through the use of bracketing methods, which we will discuss below, the HRS was able to reduce the rate of missing asset data substantially, and the data that were added in this way increased mean wealth in the HRS by about 40 percent (Smith 1995). Furthermore, because the additional data increased the mean so much, they undoubtedly increased measures of wealth inequality. JF - Inquiries in the economics of aging PB - University of Chicago Press CY - Chicago and London UR - https://www.nber.org/chapters/c7088 IS - NBER Project Report series N1 - ProCite field[3]: U CA, Berkeley and NBER; SUNY, Stony Brook, RAND, and NBER; U CA, Berkeley U4 - Economics of the Elderly/Retirement/Retirement Policies/Personal Income and Wealth Distribution/Elderly/Wealth JO - Household Wealth of the Elderly under Alternative Imputation Procedures ER - TY - CHAP T1 - Implications of Rising Personal Retirement Saving T2 - Frontiers in the Economics of Aging Y1 - 1998 A1 - James M. Poterba A1 - Steven F Venti A1 - David A Wise ED - David A Wise KW - Employment and Labor Force KW - Income KW - Pensions AB - This paper simulates the 401(k) assets of future generations of retirees and compares these assets with the social security and other assets of the households who are approaching retirement now. The accumulation of 401(k) assets at retirement for the cohort that was 25 years old in 1984 and the cohort that was 15 years old in 1984 was projected. Findings based on these projections suggest that 401(k) assets will definitely be a significant component of the retirement wealth of future retirees and could be the dominant component for a large fraction of them. JF - Frontiers in the Economics of Aging PB - University of Chicago Press CY - Chicago, IL N1 - RDA 1999-002 ProCite field 8 : ed. U4 - Economic Status--earnings histories, wealth/401(k) participation and balances/Labor JO - Implications of Rising Personal Retirement Saving ER - TY - CHAP T1 - Pensions and the Distribution of Wealth T2 - Frontiers in the Economics of Aging Y1 - 1998 A1 - Kathleen McGarry A1 - Davenport, Andrew ED - David A Wise KW - Net Worth and Assets JF - Frontiers in the Economics of Aging PB - University of Chicago Press CY - Chicago, IL N1 - ProCite field 6 : In ProCite field 8 : ed. U4 - Pension Wealth JO - Pensions and the Distribution of Wealth ER - TY - CHAP T1 - Subjective Survival Curves and Life Cycle Behavior T2 - Inquiries in the Economics of Aging Y1 - 1998 A1 - Michael D Hurd A1 - Daniel McFadden A1 - Gan, Li ED - David A Wise KW - Consumption and Savings KW - Event History/Life Cycle KW - Health Conditions and Status JF - Inquiries in the Economics of Aging T3 - NBER Project Reports PB - University of Chicago Press CY - Chicago and London N1 - ProCite field[3]: SUNY, Stony Brook, RAND, and NBER; U CA, Berkeley and NBER; U CA, BerkeleyProCite field[6]: InProCite field[8]: ed. U4 - Intertemporal Consumer Choice/Life Cycle Models and Saving/Economics of the Elderly/Health Production--Nutrition, Mortality, Morbidity, Disability, and Economic Behavior/Life Cycle JO - Subjective Survival Curves and Life Cycle Behavior ER - TY - CHAP T1 - Living Arrangements: Health and Wealth Effects T2 - Advances in the Economics of Aging Y1 - 1996 A1 - Daniel McFadden A1 - Axel Borsch-Supan A1 - Schnabel, R. ED - David A Wise KW - Health Conditions and Status KW - Housing KW - Net Worth and Assets JF - Advances in the Economics of Aging PB - University of Chicago Press CY - Chicago, IL N1 - ProCite field 8 : ed. U4 - Housing/Wealth/Health Status JO - Living Arrangements: Health and Wealth Effects ER - TY - RPRT T1 - Lump-Sum Distributions from Retirement Saving Plans: Receipt and Utility Y1 - 1995 A1 - James M. Poterba A1 - Steven F Venti A1 - David A Wise KW - Income KW - Net Worth and Assets AB - One of the central issues in evaluating the ongoing shift from defined benefit (DB) to defined contribution (DC) pension plans is the degree to which assets in DC plans will be withdrawn before plan participants reach retirement age. The annual flow of withdrawals from such plans, which are known as lump sum distributions and which are frequently but not always associated with employment changes, has exceeded 100 billion in recent years. This flow is substantially greater than the flow of new contributions to IRAs and other targeted retirement saving programs. This paper draws on data from the 1993 Current Population Survey and the Health and Retirement Survey to summarize the incidence and disposition of lump sum distributions. We find that while less than half of all lump sum distributions are rolled over into IRAs or other retirement saving plans, large distributions are substantially more likely to be saved than smaller ones are. Consequently, more than half of the dollars paid out as lump sum distributions are reinvested. We also explore the correlation between various individual characteristics and the probability of rolling over a lump sum distribution. This is a first step toward developing a model that can be used to evaluate the long- term effects of lump sum distributions, or policies that might affect them, on the financial status of elderly households. PB - NBER UR - https://www.researchgate.net/publication/5193273_Lump-Sum_Distributions_from_Retirement_Saving_Plans_Receipt_and_Utilization U4 - Retirement Incomes/Distribution ER - TY - CHAP T1 - Demographics, the Housing Market, and the Welfare of the Elderly T2 - Studies in the economics of aging Y1 - 1994 A1 - Daniel McFadden ED - David A Wise KW - Consumption and Savings KW - Demographics KW - Housing JF - Studies in the economics of aging T3 - National Bureau of Economic Research Project Report series PB - University of Chicago Press CY - Chicago and London N1 - ProCite field[3]: U CA, BerkeleyProCite field[8]: ed. U4 - Economics of the Elderly/Demographic Trends and Forecasts/Housing Supply and Markets/Demographics/Elderly/Housing JO - Demographics, the Housing Market, and the Welfare of the Elderly ER - TY - CHAP T1 - Problems of Housing the Elderly in the United States and Japan T2 - Aging in the United States and Japan Y1 - 1994 A1 - Daniel McFadden A1 - David A Wise ED - Yukio Noguchi KW - Housing KW - Methodology JF - Aging in the United States and Japan PB - University of Chicago Press CY - Chicago, IL UR - https://www.nber.org/chapters/c8044 N1 - ProCite field 8 : eds. U4 - Cross Cultural Comparison/Housing JO - Problems of Housing the Elderly in the United States and Japan ER -