Previous empirical literature has found a sharp decline in consumption during the first years of retirement implying … that individuals do not save enough for their retirement. This phenomenon has been called the retirement consumption puzzle …. In contrast to some of the previous studies, the authors find no evidence of the retirement consumption puzzle during the …

We measure the extent of consumption insurance to income shocks accounting for high-order moments of the income … distribution. We derive a nonlinear consumption function, in which the extent of insurance varies with the sign and magnitude of … income risk matters substantially for consumption …