The Effect of Retirement Date Expectations on Pre-retirement Wealth Accumulation: The Role of Gender and Bargaining Power in Married US Households

Abstract

This paper used seven waves of data from the US Health and Retirement Study to investigate the impact of expectations regarding the timing of retirement on preretirement wealth accumulation of married households. More specifically, the effect of married individuals' subjective beliefs of working full time after age 62 on household wealth was analyzed. Individuals' perceptions of the usual retirement age on the job was used as an instrument for their subjective beliefs of working full time after age 62. On a whole, the point estimates suggested that the responsiveness of married mens' saving behavior to retirement dates expectations was larger than that of married women. In particular, wealth of married households where men had the bargaining power in terms of being sole earners, exhibited the largest decrease in response to increases in subjective probabilities of working past age 62.

My Wife Is My Insurance Policy: Household Bargaining and Couples’ Purchase of Long-Term Care Insurance

“…The large economic and sociological literature on intra-household decision-making and resource allocation (e.g., Bittman et al, 2003; Horne et al, 2018; Jianakoplos & Bernasek, 2008; Lundberg et al, 1997; Lundberg et al, 2003; McElroy & Horney, 1981; Romm, 2015; for a survey, see Eswaran, 2014) suggests that, generally speaking, conflicts within families tend to be resolved in favor of family members with greater bargaining power. This insight, when applied to the specific case of LTCI purchases, suggests that if the husband has greater bargaining power, the household’s LTCI purchase decisions will be closer to those he prefers.…”

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Ten Years of Research in the Journal of Family and Economic Issues: Thoughts on Future Directions

“…Couples can disagree on retirement plans and portfolio allocation. Bargaining and power need to be considered (Romm 2015;Speelman et al 2013;Yilmazer and Lyons 2010). Further, retirement decisions and action occur within family life (Tamborini, and Purcell 2016;Whitaker and Bokemeier 2018).…”