What Determines End-of-Life Assets? A Retrospective View

James M. Poterba, Steven F. Venti, David A. Wise

NBER Retirement Research Center Paper No. NB 15-06
Issued in June 2015

We consider assets when individuals were last observed prior to death in the Health and Retirement Study (HRS) and then trace assets backwards to the age when they were first observed. We find that for most individuals, assets in the last year observed (LYO) were very similar to assets in the first year observed (FYO), and in particular that most of those who were last observed with very low asset levels also had low assets when first observed. We then explore how an individual’s education, as well as changes in health status and family composition, are related to changes in assets between the first and last time the individual was observed. We estimate these relationships for HRS respondents who were between the ages of 51 and 61 in 1992 and for AHEAD respondents who were over the age of 70 in 1993. We find that the onset of a serious health condition such as a stroke, and, for those who were married when first observed, the transition from a two-person to a one-person household, are both associated with a decline in assets when last observed conditional on assets when first observed.

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