Most married men claim Social Security benefits at age 62 or 63, well short of both Social Security’s Full Retirement Age and the age that maximizes the household’s expected present value of benefits (EPVB). This results in a loss of less than 4 percent in household EPBV. But essentially the...

Retired households must trade off the risk of outliving their wealth against the cost of unnecessarily restricting their consumption. Using numerical optimisation techniques, we compare two innovative rules of thumb: (1) consuming the age-related percentage of remaining wealth specified in the...

We find that most husbands claim Social Security before the ages that maximize the expected present value of their benefits. Although household benefits are only slightly reduced, the expected present value of widows’ benefits reduces by 17.7%, increasing their risk of poverty.

Although long-term care is a substantial financial risk for retired households, only about 10 percent purchase insurance, with many of the remainder relying on Medicaid. Faced with rising Medicaid expenditures on long-term care, states have attempted to encourage the purchase of private...

The brief’s key findings are: *Long-term care is expensive, but only 13 percent of single individuals over 65 have long-term care insurance. *Previous models of care usage appear to understate the risk of going into care and overstate the duration of care for those who require it. *If...

Between 1995 and 2007, inflation-adjusted house prices more than doubled in some areas of the United States. During this unprecedented boom, households spent more and reduced their saving rate. A key question is how much of the increased spending was related to rising house prices, as opposed to...

The prospect of paying for nursing home care represents a significant financial risk for older Americans. Despite this risk, few individuals buy long-term care insurance and, since many lack the resources to pay out of pocket, they often turn to the means-tested Medicaid program. Concerned about...

Long-term care is one of the major expenses faced by many older Americans. Yet, we have only limited information about the risk of needing long-term care and the expected duration of care. The expectations of needing to receive home health care, live in an assisted living facility or live in a...

Households managing wealth decumulation in retirement must trade off the risk of outliving their wealth against the cost of unnecessarily restricting their consumption. Devising an optimal decumulation plan, reflecting uncertain mortality and asset returns, is well beyond the abilities of most...