How Family Status and Social Security Claiming Options Shape Optimal Life Cycle Portfolios

Andreas Hubener, Raimond Maurer and Olivia Mitchell

No 19583, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Household decisions are profoundly shaped by a complex set of financial options due to Social Security rules determining retirement, spousal, and survivor benefits, along with benefit adjustments that vary with the age at which these are claimed. These rules influence optimal household asset allocation, insurance, and work decisions, given life cycle demographic shocks such as marriage, divorce, and children. Our model generates a wealth profile and a low and stable equity fraction consistent with empirical evidence. We also confirm predictions that wives will claim retirement benefits earlier than husbands, while life insurance is mainly purchased by younger men. Our policy simulations imply that eliminating survivor benefits would sharply reduce claiming differences by sex while dramatically increasing men's life insurance purchases.

JEL-codes: D1 D13 G11 H55 J12 J22 J26 (search for similar items in EconPapers)
Date: 2013-10
New Economics Papers: this item is included in nep-age and nep-ias
Note: AG LS
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Published as Andreas Hubener & Raimond Maurer & Olivia S. Mitchell, 2016. "How Family Status and Social Security Claiming Options Shape Optimal Life Cycle Portfolios," Review of Financial Studies, Society for Financial Studies, vol. 29(4), pages 937-978.

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Related works:
Journal Article: How Family Status and Social Security Claiming Options Shape Optimal Life Cycle Portfolios (2016)
Working Paper: How Family Status and Social Security Claiming Options Shape Optimal Life Cycle Portfolios (2013)
Working Paper: How family status and social security claiming options shape optimal life cycle portfolios (2013)
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