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The Retirement-Consumption Puzzle: Anticipated and Actual Declines in Spending at Retirement / Michael Hurd, Susann Rohwedder.
- Format:
- Book
- Author/Creator:
- Hurd, Michael.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w9586.
- NBER working paper series no. w9586
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Other Title:
- The Retirement-Consumption Puzzle
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2003.
- Summary:
- The simple one-good model of life-cycle consumption requires consumption smoothing.' However, British and U.S. households apparently reduce consumption at retirement and the reduction cannot be explained by the life-cycle model. An interpretation is that retirees are surprised by the inadequacy of resources. This interpretation challenges the life-cycle model where consumers are forward looking. However, data on anticipated consumption changes at retirement and on realized consumption changes following retirement show that the reductions are fully anticipated. Apparently the decline is due to the cessation of work-related expenses and the substitution of home production for market-purchased goods and services.
- Notes:
- Print version record
- March 2003.
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