Saving Behavior and Portfolio Choice After Retirement

Ooijen, Raun van; Alessie, Rob; Kalwij, Adriaan

doi:10.1007/s10645-015-9254-z

Cited by 55 publications

(59 citation statements)

References 94 publications

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“…This evidence has been recently confirmed by Van Ooijen et al. () who describe the saving behaviour and the portfolio choice of Dutch retirees by exploiting high‐quality administrative data for the period 2005–2010. Like Van der Schors et al .…”

Section: Home Equity In Retirementsupporting

confidence: 57%

The Retirement‐savings Puzzle Reviewed: The Role of Housing and Bequests

Andreu

Alessie

Angelini

2018

Journal of Economic Surveys

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The so‐called retirement‐savings puzzle is a phenomenon by which, contrary to what the standard life‐cycle model predicts, households do not run down their wealth significantly during retirement. In this review paper, we survey the literature on the retirement‐savings puzzle and we connect it with the literature on housing equity during retirement. To establish a link between these two streams of literature, we use as a framework the work of Nakajima and Telyukova (2013a, Home equity in retirement, UCSD Working Paper) and Nakajima and Telyukova (2017, Reverse mortgage loans: a quantitative analysis, Journal of Finance 72: 911–950), who find that home‐ownership interacts with factors that explain the retirement‐savings puzzle, notably with the bequest motive. We complement the results by Nakajima and Telyukova by relating them to the literature on altruistic bequests, strategic bequests and housing as a commitment device, all of which give further insights on the connection between home‐ownership and bequests. We complement our review of the literature with descriptive evidence using the Netherlands as a case study.

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Section: Home Equity In Retirementsupporting

confidence: 57%

The Retirement‐savings Puzzle Reviewed: The Role of Housing and Bequests

Andreu

Alessie

Angelini

2018

Journal of Economic Surveys

Self Cite

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“…Universal long-term care insurance would also be expected to have implications for wealth accumulation by reducing the need to hold precautionary savings against the risk of care needs in old age. Indeed, many Dutch households hold only a very small amount of liquid assets (Van Ooijen et al, 2014).…”

Section: Discussionmentioning

confidence: 99%

Spending on Health Care in the Netherlands: Not Going So Dutch

2017

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AbstractThe Netherlands is among the top spenders on health in the OECD. We document the lifecycle profile, concentration and persistence of this expenditure using claims data covering both curative and long-term care expenses for the full Dutch population. Spending on health care is strongly concentrated: the one per cent of individuals with the highest levels of expenditure account for one quarter of the aggregate in any one year. Averaged over three years, the top one per cent still accounts for more than a fifth of the total, indicating a very high degree of persistence in the largest expenses. Spending on long-term care, which amounts to one third of all expenditure on health care, is even more concentrated: the top one per cent accounts for more than half of total spending on this type of care. Average expenditure rises steeply with age and even more so with proximity to death. Spending on individuals in their last year of life absorbs one tenth of aggregate health care expenditure. In a given year, spending on health care is highly skewed toward individuals with lower incomes. Average expenditure on the poorest fifth is more than three times that on the richest fifth. Spending on long-term care is five times more concentrated on the poor. Policy Points1. Spending on health care is highly concentrated on a small share of the population and is strongly persistent over time. 2. Public spending on long-term care is high and is even more concentrated and persistent. 3. In any given year, health spending is highly skewed towards poorer individuals. 4. The high concentration and persistence imply substantial interpersonal redistribution. 5. Steeply rising health expenditures with age and proximity to death imply substantial intrapersonal redistribution across the life cycle. JEL Codes: D12, I13, I14

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“…The appropriate measure of wealth would be the sum of private A(t) and pension wealth b(R) T t e −δt dt. In our data we only have information on pension wealth, which is by far the most important component (more than 60%) of total household wealth for the 65-70 age group (van Ooijen et al 2015). Since high pension wealth is generally positively correlated with private wealth, we use pension wealth as a proxy for full wealth (or permanent income q A (R)).…”

Section: Empirical Strategymentioning

confidence: 99%

Interactions between Financial Incentives and Health in the Early Retirement Decision

et al. 2017

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. April 27, 2017 Terms of use: Documents in AbstractWe present a theory of the relation between health and retirement that generates testable predictions regarding the interaction of health, wealth and financial incentives in retirement decisions. The theory predicts (i) that wealthier individuals (compared to poorer individuals) are more likely to retire for health reasons (affordability proposition), and (ii) that health problems make older workers more responsive to financial incentives encouraging retirement (reinforcement proposition). We test these predictions using administrative data on older employees in the Dutch healthcare sector for whom we link adverse health events, proxied by unanticipated hospitalizations, to information on retirement decisions and actual incentives from administrative records of the pension funds. Exploiting unexpected health shocks and quasi-exogenous variation in financial incentives for retirement due to reforms, we account for the endogeneity of health and financial incentives. Making use of the actual individual pension rights diminishes downward bias in estimates of the effect of pension incentives. We find support for our affordability and reinforcement propositions. Both propositions require the benefits function to be convex, as in our data. Our theory and empirical findings highlight the importance of assessing financial incentives for their potential reinforcement of health shocks and point to the possibility that differences in responses to financial incentives and health shocks across countries may relate to whether the benefit function is concave or convex.

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Saving Behavior and Portfolio Choice After Retirement

Cited by 55 publications

References 94 publications

The Retirement‐savings Puzzle Reviewed: The Role of Housing and Bequests

The Retirement‐savings Puzzle Reviewed: The Role of Housing and Bequests

Spending on Health Care in the Netherlands: Not Going So Dutch

Interactions between Financial Incentives and Health in the Early Retirement Decision

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