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Keywords:Retirement income 

Journal Article
Fuzzy math : public pensions are underfunded - how bad is it?

Related links: https://www.richmondfed.org/-/media/richmondfedorg/publications/research/econ_focus/2010/q3/cover_weblinks.cfm
Econ Focus , Volume 14 , Issue 3Q , Pages 14-17

Journal Article
Opt in or opt out?

Econ Focus , Volume 11 , Issue Win , Pages 28-31

Discussion Paper
Optimal retirement asset decumulation strategies: the impact of housing wealth

A considerable literature examines the optimal decumulation of financial wealth in retirement. We extend this line of research to incorporate housing, which comprises the majority of most households? non-pension wealth. ; We estimate the relationship between the returns on housing, stocks, and bonds, and simulate a variety of decumulation strategies incorporating reverse mortgages. We show that homeowner?s reversionary interest, the amount that can be borrowed through a reverse mortgage, is a surprisingly risky asset. Under our baseline assumptions we find that the average household would be ...
Public Policy Discussion Paper , Paper 07-2

Discussion Paper
A new approach to raising Social Security’s earliest eligibility age

While Social Security?s Normal Retirement Age (NRA) is increasing to 67, the Earliest Eligibility Age (EEA) remains at 62. Similar plans to increase the EEA raise concerns that they would create excessive hardship on workers who are worn-out or in bad health. One simple rule to increase the EEA is to tie an increase to the number of quarters of covered earnings. Such a provision would allow those with long work lives?presumably the less educated and lower paid?to quit earlier. We provide evidence that this simple rule would not satisfy the goal of preventing undue hardship on certain workers. ...
Public Policy Discussion Paper , Paper 08-4

Conference Paper
Challenges facing the benefit system

Proceedings , Paper 990

Working Paper
Why do the elderly save? the role of medical expenses

This paper constructs a rich model of saving for retired single people. Our framework allows for bequest motives and heterogeneity in medical expenses and life expectancies. We estimate the model using AHEAD data and the method of simulated moments. The data show that out-of-pocket medical expenses rise quickly with both age and permanent income. For many elderly people the risk of living long and requiring expensive medical care is a more important driver of old age saving than the desire to leave bequests. Social insurance programs such as Medicaid rationalize the low asset holdings of the ...
Working Paper Series , Paper WP-09-02

Working Paper
Life expectancy and old age savings

Rich people, women, and healthy people live longer. We document that this heterogeneity in life expectancy is large. We use an estimated structural model to assess the impact of life expectancy variation on the elderly?s savings. We find that the differences in life expectancy related to observable factors such as health, gender, and income have large effects on savings, and that these factors contribute by similar amounts. We also show that the risk of outliving one?s expected lifespan has a large effect on the elderly?s saving behavior.
Working Paper Series , Paper WP-08-18

Working Paper
The tradeoff between mortgage prepayments and tax-deferred retirement savings

We show that a significant number of households can perform a tax arbitrage by cutting back on their additional mortgage payments and increasing their contributions to tax- deferred accounts (TDA). Using data from the Survey of Consumer Finances, we show that about 38% of U.S. households that are accelerating their mortgage payments instead of saving in tax-deferred accounts are making the wrong choice. For these households, reallocating their savings can yield a mean benefit of 11 to 17 cents per dollar, depending on the choice of investment assets in the TDA. ; In the aggregate, these ...
Working Paper Series , Paper WP-06-05

Working Paper
Do households have enough wealth for retirement?

Dramatic structural changes in the U.S. pension system, along with the impending wave of retiring baby boomers, have given rise to a broad policy discussion of the adequacy of household retirement wealth. We construct a uniquely comprehensive measure of wealth for households aged 51 and older in 2004 that includes expected wealth from Social Security, defined benefit pensions, life insurance, annuities, welfare payments, and future labor earnings. Abstracting from the uncertainty surrounding asset returns, length of life and medical expenses, we assess the adequacy of wealth using two ...
Finance and Economics Discussion Series , Paper 2007-17

Working Paper
The trajectory of wealth in retirement

As the baby boomers begin to retire, a great deal remains unknown about the evolution of wealth toward the end of life. In this paper, we develop a new measure of household resources that converts total financial, nonfinancial, and annuitized assets into an expected annual amount of wealth per person. We use this measure, which we call "annualized comprehensive wealth," to investigate spend-down behavior among older households in the Health and Retirement Study. Our analysis indicates that, in (real) dollar terms, the median household?s wealth declines more slowly than its remaining life ...
Finance and Economics Discussion Series , Paper 2008-13

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