Home Equity in Retirement

Irina Telyukova () and Makoto Nakajima ()

No 2011-WP-08B, NFI Working Papers from Indiana State University, Scott College of Business, Networks Financial Institute

Abstract: Retired homeowners dissave more slowly than renters, which suggests that homeownership affects retirees' saving decisions. We investigate empirically and theoretically the life-cycle patterns of housing and total assets in retirement. Using an estimated structural model of saving and housing decisions, we find, first, that homeowners dissave slowly because they prefer to stay in their house as long as possible, but cannot easily borrow against it. Second, the 1996-2006 housing boom further increased homeowners' assets. These channels are quantitatively significant; without considering homeownership, retirees' savings are 22-40% lower.

Keywords: Housing; Retirement Saving Puzzle; Mortgage; Health; Life-cycle (search for similar items in EconPapers)
JEL-codes: D91 E21 G11 J26 (search for similar items in EconPapers)
Pages: 45 pages
Date: 2011-05, Revised 2011-08
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (15)

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Related works:
Journal Article: HOME EQUITY IN RETIREMENT (2020)
Working Paper: Home Equity in Retirement (2019)
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