@article{93ed6660875d43f7b5f0e3cebe6a9a50,
title = "The role of annuitized wealth in post-retirement behavior",
abstract = "This paper develops a tractable model of post-retirement behavior with health status uncertainty and state-verification difficulties. The model distinguishes between annuitized and non-annuitized wealth and features means-tested Medicaid assistance with nursing home care. We show how to solve the potentially complex dynamic problem analytically, making it possible to characterize optimal behavior with phase diagrams. The analysis provides an integrated treatment of portfolio composition and consumption/wealth accumulation choices. We show the model can explain both the {"}retirement-saving puzzle{"} and the {"}annuity puzzle{"}.",
author = "John Laitner and Daniel Silverman and Dmitriy Stolyarov",
note = "Funding Information: * Laitner: Department of Economics, University of Michigan, 611 Tappan Ave., Ann Arbor, MI 48109 (email: jlaitner@umich.edu); Silverman: Department of Economics, W.P. Carey School of Business, Arizona State University, PO Box 879801, Tempe, AZ 85287 (email: dsilver3@asu.edu); Stolyarov: Department of Economics, University of Michigan, 611 Tappan Ave, Ann Arbor, MI 48109 (email: stolyar@umich.edu). The authors thank Andrew Caplin and Matthew Shapiro, as well as seminar participants at University of California Santa Barbara, MRRC Research Workshop, NBER Summer Institute, BYU Computational Economics Conference, Kansai University Osaka, NETSPAR Conference Amsterdam, “Working Longer and Retirement” Conference at SIEPR, and CIREQ Workshop Montreal. This work was supported by NIH/NIA grant R01-AG030841-01. The opinions and conclusions are solely those of the authors and should not be considered as representing the options or policy of any agency of the federal government. Publisher Copyright: {\textcopyright} 2018 American Economic Association.",
year = "2018",
month = jul,
day = "1",
doi = "10.1257/mac.20160343",
language = "English (US)",
volume = "10",
pages = "71--117",
journal = "American Economic Journal: Macroeconomics",
issn = "1945-7707",
publisher = "American Economic Association",
number = "3",
}