THE RETIREMENT‐SAVINGS PUZZLE REVIEWED: THE ROLE OF HOUSING AND BEQUESTS

Eduard Suari‐Andreu, Rob Alessie and Viola Angelini
Authors registered in the RePEc Author Service: Eduard Suari-Andreu

Journal of Economic Surveys, 2019, vol. 33, issue 1, 195-225

Abstract: The so‐called retirement‐savings puzzle is a phenomenon by which, contrary to what the standard life‐cycle model predicts, households do not run down their wealth significantly during retirement. In this review paper, we survey the literature on the retirement‐savings puzzle and we connect it with the literature on housing equity during retirement. To establish a link between these two streams of literature, we use as a framework the work of Nakajima and Telyukova (2013a, Home equity in retirement, UCSD Working Paper) and Nakajima and Telyukova (2017, Reverse mortgage loans: a quantitative analysis, Journal of Finance 72: 911–950), who find that home‐ownership interacts with factors that explain the retirement‐savings puzzle, notably with the bequest motive. We complement the results by Nakajima and Telyukova by relating them to the literature on altruistic bequests, strategic bequests and housing as a commitment device, all of which give further insights on the connection between home‐ownership and bequests. We complement our review of the literature with descriptive evidence using the Netherlands as a case study.

Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:bla:jecsur:v:33:y:2019:i:1:p:195-225

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