Households face earnings risk which is non-normal and varies by age and over the income distribution. We show that … assets. Because households are subject to more background risk than previously considered, the estimated model implies a … substantially lower coefficient of risk aversion. We also find renewed support for rule-of-thumb investment strategies under the …

to evaluate the adequacy of retirement savings. We find first that the specification of the model's asset structure … have access only to a risk‐free asset compared to when we account for the fact that much of their wealth is stored in …