Baby Boomer Retirement Security: the Roles of Planning, Financial Literacy, and Housing Wealth
We compare wealth holdings across two cohorts of the Health and Retirement Study: the early Baby Boomers in 2004, and individuals in the same age group in 1992. Levels and patterns of total net worth have changed relatively little over time, though Boomers rely more on housing equity than their predecessors. Most important, planners in both cohorts arrive close to retirement with much higher wealth levels and display higher financial literacy than non-planners. Instrumental variables estimates show that planning behavior can explain the differences in savings and why some people arrive close to retirement with very little or no wealth.
The research reported herein was pursuant to a grant from the US Social Security Administration (SSA) funded as part of the Michigan Retirement Research Center (MRRC) and the Pension Research Council at the Wharton School. The authors thank Honggao Cao, John Leahy, Bill Rodgers, David Weir, and participants to the Carnegie-Rochester Conference on Public Policy in April 2006 for suggestions and comments. Jason Beeler provided excellent research assistance. Opinions, errors, and conclusions are solely those of the authors and do not represent the views of the SSA, any agency of the Federal Government, or the MRRC. The views expressed herein are those of the author(s) and do not necessarily reflect the views of the National Bureau of Economic Research.
- The large "Baby Boom" generation (traditionally defined as those born between 1946 and 1964) is now on the cusp of retirement, with the...
Lusardi, Annamaria & Mitchell, Olivia S., 2007. "Baby Boomer retirement security: The roles of planning, financial literacy, and housing wealth," Journal of Monetary Economics, Elsevier, vol. 54(1), pages 205-224, January. citation courtesy of