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dc.contributor.authorLusardi, Annamaria
dc.contributor.authorMitchell, Olivia S.
dc.date.accessioned2007-02-14T19:26:43Z
dc.date.available2007-02-14T19:26:43Z
dc.date.issued2006-04
dc.identifier.urihttps://hdl.handle.net/2027.42/49426
dc.description.abstractRecent research on wealth and household finances seeks to blend neoclassical models with an understanding of real-world imperfections to answer questions about why some people save and others do not. This paper focuses on Baby Boomers standing on the verge of retirement, many of whom have saved little and will face financial insecurity in old age. The new 2004 wave of the Health and Retirement Study is invaluable for this first analysis of the financial situation of leading-edge Boomers, as it reports not only wealth levels but also information about respondents’ planning behaviors and economic literacy. We show that the distribution of net worth among Early Baby Boomers is quite skewed; those in the 75th percentile had over 10 times the net worth ($400K) of households in the bottom 25th percentile ($37K). There is substantial heterogeneity in wealth within this cohort: the median high-school dropout had less than $23K in total net worth, while the median college graduate had over 10 times as much. Many Black and Hispanic Boomer households hold miniscule levels of wealth. Further, many in this cohort have accumulated little wealth outside their homes: at the mean, one-third of the early Boomers’ wealth is held in the form of home equity, and at the median the fraction is close to half. Since many members of this EBB cohort are reaching retirement with a substantial portion of its wealth in housing, they are particularly vulnerable to housing value shocks. By contrast, holders of stocks, IRAs, and business equity are concentrated in the top quartiles. Finally, we show that planning and economic literacy are important predictors of savings and investment success.en
dc.description.sponsorshipSocial Security Administrationen
dc.format.extent427791 bytes
dc.format.mimetypeapplication/pdf
dc.language.isoen_USen
dc.publisherMichigan Retirement Research Center, University of Michigan, P.O. Box 1248, Ann Arbor, MI 48104en
dc.titleBaby Boomer Retirement Security: The Roles of Planning, Financial Literacy, and Housing Wealthen
dc.typeWorking Paperen
dc.subject.hlbsecondlevelPopulation and Demography
dc.subject.hlbtoplevelSocial Sciences
dc.contributor.affiliationumUniversity of Michigan Retirement Research Centeren
dc.contributor.affiliationumInstitute for Social Researchen
dc.contributor.affiliationotherDartmouth Collegeen
dc.contributor.affiliationotherWharton School, University of Pennsylvaniaen
dc.contributor.affiliationumcampusAnn Arboren
dc.description.bitstreamurlhttp://deepblue.lib.umich.edu/bitstream/2027.42/49426/1/wp114.pdfen_US
dc.owningcollnameRetirement Research Center, Michigan (MRRC)


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