Managing Retirement Incomes

James Banks () and Rowena Crawford
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James Banks: Department of Economics, University of Manchester, Manchester, United Kingdom
Rowena Crawford: Institute for Fiscal Studies, London, United Kingdom

Annual Review of Economics, 2022, vol. 14, issue 1, 181-204

Abstract: In this article we discuss the state of the literature relating to the decumulation of retirement wealth and the management of retirement incomes. On the one hand, life-cycle models that allow for strong bequest motives and for the effects of medical expense risks have been shown to be able to rationalize retirees’ wealth, income, and consumption trajectories. On the other, studies of individual asset choices and portfolio decisions seem to suggest low levels of financial literacy and engagement as well as non-negligible consequences of age-related cognitive decline on financial decision making. We argue that future work should try to reconcile these two sets of conflicting findings into a coherent and holistic evidence base to inform policy, because issues concerning the management of retirement incomes, and insurance against different risks in retirement more generally, will become increasingly important for future cohorts of retirees.

Keywords: retirement saving; financial literacy; wealth decumulation (search for similar items in EconPapers)
JEL-codes: D14 D91 G53 (search for similar items in EconPapers)
Date: 2022
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DOI: 10.1146/annurev-economics-051420-014808

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