Age pensioner decumulation: Responses to incentives, uncertainty and family need

Anthony Asher, Ramona Meyricke, Susan Thorp and Shang Wu
Additional contact information
Anthony Asher: The School of Risk & Actuarial Studies, UNSW Business School, UNSW Sydney, Sydney, NSW, Australia
Ramona Meyricke: CEPAR, UNSW Sydney, Sydney, NSW, Australia; The School of Risk & Actuarial Studies, UNSW Business School, UNSW Sydney, Sydney, NSW, Australia
Shang Wu: CEPAR, UNSW Sydney, Sydney, NSW, Australia; The School of Risk & Actuarial Studies, UNSW Business School, UNSW Sydney, Sydney, NSW, Australia

Australian Journal of Management, 2017, vol. 42, issue 4, 583-607

Abstract: Effective design and regulation of retirement benefits require accurate understanding of how the elderly decumulate. We analyse the income, assets and decumulation patterns of a longitudinal panel of 10,000 Australian age pensioners. On average, age pensioners preserve financial and residential wealth and leave substantial bequests. There is, however, considerable heterogeneity in decumulation patterns. Younger households generally run down financial wealth, while older households maintain their assets or save. Means-testing accelerates decumulation, with average drawdown rates 3% higher for pensioners subject to the income test relative to full pensioners and 9% higher for those subject to the asset test relative to full pensioners. Loss of a partner is linked to large falls in assets. The theoretical, empirical, and practical implications of these findings are discussed.

Keywords: Life-cycle saving; portfolio choice; public pension; retirement wealth (search for similar items in EconPapers)
JEL-codes: D91 E21 G11 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (17)

Downloads: (external link)
https://journals.sagepub.com/doi/10.1177/0312896216682577 (text/html)

Related works:
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:sae:ausman:v:42:y:2017:i:4:p:583-607

DOI: 10.1177/0312896216682577

Access Statistics for this article

More articles in Australian Journal of Management from Australian School of Business
Bibliographic data for series maintained by SAGE Publications ().