Are You Sure You're Saving Enough for Retirement? / Jonathan Skinner.

Format:

Book

Author/Creator:

Skinner, Jonathan.

Contributor:

National Bureau of Economic Research.

Series:

Working Paper Series (National Bureau of Economic Research) no. w12981.

NBER working paper series no. w12981

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2007.

Summary:

Many observers believe current aging baby boomers are woefully unprepared for retirement. Others raise the prospect that Americans are saving too much for retirement. This paper attempts to reconcile these contrasting views using a simple life cycle model and a more sophisticated retirement program, ESPlanner, with special reference to retirement prospects for economists. I find most households with post-graduate degrees fall short of the wealth needed to smooth spending through retirement. Of course, there are ways to economize during retirement: stepping up household production (cooking at home rather than eating out), selling one's house, or maintaining the modest individual consumption levels from when children still roamed the house. But ultimately, I argue these laudable strategies to reduce retirement expenses will be dwarfed by rapidly growing out-of-pocket medical expenses. The combination of eroding retiree health benefits and the risk of catastrophic future out-of-pocket health spending suggests that even conventional retirement planning recommendations could be too low.

Notes:

Print version record

March 2007.