Cohort differences in wealth and pension participation of near-retirees.
نویسندگان
چکیده
The approaching retirement of the baby-boom generation has attracted both research and public policy attention. Many social and economic changes occurred during the second half of the twentieth century, changes that are likely to affect the retirement economic security of recent cohorts in many ways. In this article, using data from the Health and Retirement Study (HRS), a longitudinal, nationally representative survey of older Americans, we compare potential retirement economic resources-pension participation and nonpension net worth-of two cohorts of near-retirees. Particularly we look at individuals born from 1933 through 1939, often referred to as depression babies, who were ages 55-61 in 1994 and the more recent cohort consisting of individuals of the same ages (55-61) in 2004, who were born from 1943 through 1949. Our findings indicate that the more recent cohort of near-retirees has a significantly higher pension participation rate over their working life, and therefore greater opportunity to establish pension income through their working life, compared with the earlier cohort (82 percent versus 64 percent). The increase in pension participation was more pronounced among the recent cohort of women, an expected outcome given the increase in labor force participation of women over the past half century. As a result, although differences by sex in pension participation remained significant, the gap has narrowed for the recent cohort of near-retirees. In addition, we find that the gap in participation rate between those in the highest and the lowest wealth quintiles has widened over time (from 22 percent in 1994 to 26 percent in 2004). For both cohorts of near-retirees, the evidence indicates that those without a pension have much lower levels of net total worth than those who report having a pension. The pattern that emerges for both cohorts is that about one-fifth of individuals aged 55-61 hold little or no wealth at all, whereas about two-fifths hold a substantial amount of wealth. In addition, housing equity, which rarely is used to finance consumption in retirement, comprises more than one-half of total nonpension net worth for about 60 percent of all households, leaving--on average less than $45,000 jointly in nonhousing wealth and IRA/Keogh assets--a much smaller amount of wealth that is readily accessible if the need arises. The fact that many near-retirees (about 40 percent) in the lowest-two wealth quintiles have no pension to potentially draw income from, coupled with the very low level of total nonpension wealth raises concern about their income security in retirement; they may be likely to rely heavily on Social Security, rely on welfare programs, or continue work in retirement.
منابع مشابه
Structural Determinants of Workforce Participation after Retirement in Poland
In this paper, we aim to analyse selected structural determinants of workforce participation after retirement in Poland. By structural determinants we mean characteristics of one's socio-economic position that (a) result from the interplay of social conditions (mechanisms of power, differentiated access to resources) and individual agency, and (b) restrict or facilitate individuals' choices. We...
متن کاملRetirement plan participation and retirees' perception of their standard of living.
• SIPP data and retirement plan coverage—This Issue Brief focuses on a critical factor in retirement security: the presence of income or assets from an employment-based retirement plan. It is the third in a series of EBRI publications based on the Retirement and Pension Plan Coverage Topical Module of the 2001 Survey of Income and Program Participation (SIPP), which has a wealth of data on work...
متن کاملThe Wealth of Older Americans and the Sub-prime Debacle
This study explores the consequences of the housing price bubble and its collapse for the wealth of older households. We utilize micro survey data to follow the rise in home values to 2007, observing which households enjoyed home price appreciation and how they responded in terms of equity withdrawal. We then use the SCF survey data on wealth holdings from 2007 in combination with national pric...
متن کاملThe Effects of Parametric Reforms on Retirees’ Welfare and Financial Sustainability of the Social Security Organization Pension System
Extended Abstract Introduction: The World Bank in its 2017 report on Iran, listed three crises for the Iranian economy: pension funds, water security, and ecology. Pension funds crisis can be addressed in many respects, but what is now referred to, as the main problem of pension funds in Iran, is the large financial deficit in the three pension funds: Civil Servants Pension Fund (CSPO), Armed ...
متن کاملThe Effects of Parametric Reforms on Retirees’ Welfare and Financial Sustainability of the Social Security Organization Pension System
Extended Abstract Introduction: The World Bank in its 2017 report on Iran, listed three crises for the Iranian economy: pension funds, water security, and ecology. Pension funds crisis can be addressed in many respects, but what is now referred to, as the main problem of pension funds in Iran, is the large financial deficit in the three pension funds: Civil Servants Pension Fund (CSPO), Armed ...
متن کاملذخیره در منابع من
با ذخیره ی این منبع در منابع من، دسترسی به آن را برای استفاده های بعدی آسان تر کنید
برای دانلود متن کامل این مقاله و بیش از 32 میلیون مقاله دیگر ابتدا ثبت نام کنید
ثبت ناماگر عضو سایت هستید لطفا وارد حساب کاربری خود شوید
ورودعنوان ژورنال:
- Social security bulletin
دوره 68 3 شماره
صفحات -
تاریخ انتشار 2008