Much of the disagreement as to whether households are adequately prepared for retirement reflects differences in assumptions regarding the extent to which consumption declines when the kids leave home. If consumption declines substantially when the kids leave home, as some life-cycle models of...

Individuals can claim Social Security at any age from 62 to 70 although most claim at 62 or soon thereafter. Those who delay claiming receive increases that are approximately actuarially fair. We show that expected present value calculations substantially understate both the optimal claim age...

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...

This paper investigates the impact on labor supply of changes in the Social Security earnings test in 1996 and 2000. We highlight how the persistence of labor supply choices influences both responses to policy changes and the estimation of such responses. We do this in two ways. First, we use...

Most married men claim Social Security benefits at age 62 or 63, well short of the age that maximizes the expected present value of the average household's benefits. That many married men "leave money on the table" is surprising. It is also problematic. It results in much lower benefits for...

The National Retirement Risk Index has shown that even if households work to age 65 and annuitize all their financial assets, including the receipts from reverse mortgages on their homes, 44 percent will be 'at risk' of being unable to maintain their standard of living in retirement. More...

Immediate annuities provide insurance against outliving one's wealth. Previous research has shown that this insurance ought to be valuable to risk-averse households facing an uncertain lifespan. But rates of voluntary annuitization remain extremely low. Many explanations have been offered for...

The Center's National Retirement Risk Index (NRRI) provides a measure of the percentage of households that will be unable to maintain their standard of living in retirement. Issued in June 2006 with numbers based on the 2004 Federal Reserve's Survey of Consumer Finances, the Index shows that 43...