TY  - JOUR
AU  - Skinner,Jonathan
TI  - Are You Sure You're Saving Enough for Retirement?
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 12981
PY  - 2007
Y2  - March 2007
UR  - http://www.nber.org/papers/w12981
L1  - http://www.nber.org/papers/w12981.pdf
N1  - Author contact info:
Jonathan S. Skinner
Department of Economics
6106 Rockefeller Hall
Dartmouth College
Hanover, NH 03755
Tel: 603/646-2535
Fax: 603/646-2122
E-Mail: jonathan.skinner@dartmouth.edu
AB  - Many observers believe current aging baby boomers are woefully unprepared for retirement.  Others raise the prospect that Americans are saving too much for retirement.  This paper attempts to reconcile these contrasting views using a simple life cycle model and a more sophisticated retirement program, ESPlanner, with special reference to retirement prospects for economists.  I find most households with post-graduate degrees fall short of the wealth needed to smooth spending through retirement.  Of course, there are ways to economize during retirement: stepping up household production (cooking at home rather than eating out), selling one's house, or maintaining the modest individual consumption levels from when children still roamed the house.  But ultimately, I argue these laudable strategies to reduce retirement expenses will be dwarfed by rapidly growing out-of-pocket medical expenses.  The combination of eroding retiree health benefits  and the risk of catastrophic future out-of-pocket health spending suggests that even conventional retirement planning recommendations could be too low.
ER  -