Cohort Differences in Wealth and Pension Participation of Near-Retirees

The approaching retirement of the baby boom generation has attracted both research and public policy attention. Many changes occurred during the second half of the twentieth century, changes likely to affect the retirement economic security of recent cohorts. Using data from the Health and Retirement Study, we compare pension participation and nonpension net worth of two cohorts of near retirees, those born in1933 through 1939 who were ages 55-61 in 1994, and the more recent cohort consisting of people of the same age in 2004 who were born in 1943 through 1949. We find that the recent cohort of near-retirees has a higher lifetime pension participation rate compared to the earlier cohort, but the gap in the participation rate between the highest and the lowest wealth quintiles has widened. Pension holders have much higher levels of total net worth than nonpension holders, and the degree of wealth inequality has increased over time