Why Do Retired Households Draw Down Their Wealth So Slowly?

Eric French, John Jones and Rory McGee

Journal of Economic Perspectives, 2023, vol. 37, issue 4, 91-114

Abstract: Retired households, especially those with high lifetime income, decumulate their wealth very slowly, and many die leaving large estates. The three leading explanations for the "retirement savings puzzle" are the desire to insure against uncertain lifespans and medical expenses, the desire to leave bequests to one's heirs, and the desire to remain in one's own home. We discuss the empirical strategies used to differentiate these motivations, most of which go beyond wealth to exploit additional features of the data. The literature suggests that all the motivations are present, but has yet to reach a consensus about their relative importance.

JEL-codes: D12 G51 J14 J26 (search for similar items in EconPapers)
Date: 2023
References: Add references at CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
https://www.aeaweb.org/doi/10.1257/jep.37.4.91 (application/pdf)
https://www.aeaweb.org/doi/10.1257/jep.37.4.91.ds (application/zip)

Related works:
Working Paper: Why Do Retired Households Draw Down Their Wealth So Slowly? (2023)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:aea:jecper:v:37:y:2023:i:4:p:91-114

Ordering information: This journal article can be ordered from
https://www.aeaweb.org/journals/subscriptions

DOI: 10.1257/jep.37.4.91

Access Statistics for this article

Journal of Economic Perspectives is currently edited by Enrico Moretti

More articles in Journal of Economic Perspectives from American Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Michael P. Albert ().