What the Stock Market Decline Means for the Financial Security and Retirement Choices of the Near-Retirement Population

This paper is forthcoming in the Journal of Economic Perspectives, 2010. The findings and conclusions expressed are solely those of the authors and do not represent the views of the National Bureau of Economic Research, the Social Security Administration, the National Institute on Aging, or the Michigan Retirement Research Center. We would like to acknowledge support from the Social Security Administration through the Michigan Retirement Research Center, grant number UM09-09. The overall context for our discussion in this article is provided by our forthcoming book, Pensions in the Health and Retirement Study, Harvard University Press, which benefitted from support by NIA grants "Economic and Health Determinants of Retirement Behavior," IPOIAG022481, "Behavioral Analysis In Structural Retirement Models" R01 AG024337, "Integrating Retirement Models" R01 AG022956, and from subcontracts from the Health and Retirement Study to Dartmouth College (U01AG09740). We are grateful to Kandice Kapinos and her colleagues at the Health and Retirement Study who provided us with data estimating Social Security wealth and to Kapinos for her advice on the data. David Autor, James Hines, Howard Iams, Bruce Sacerdote, Andrew Samwick, Timothy Taylor, Steve Venti and participants at the NBER Summer Institute and RRC summer meetings provided many useful comments.