The role of annuitized wealth in post-retirement behavior

John Laitner, Daniel Silverman, Dmitriy Stolyarov

Research output: Contribution to journalArticle

1 Citation (Scopus)

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".

Original languageEnglish (US)
Pages (from-to)71-117
Number of pages47
JournalAmerican Economic Journal: Macroeconomics
Volume10
Issue number3
DOIs
StatePublished - Jul 1 2018

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Retirement behavior
Wealth
Complex dynamics
Integrated
Wealth accumulation
Home care
Retirement saving
Nursing homes
Annuities
Portfolio composition
Medicaid
Diagrams
Health status
Uncertainty

ASJC Scopus subject areas

  • Economics, Econometrics and Finance(all)

Cite this

The role of annuitized wealth in post-retirement behavior. / Laitner, John; Silverman, Daniel; Stolyarov, Dmitriy.

In: American Economic Journal: Macroeconomics, Vol. 10, No. 3, 01.07.2018, p. 71-117.

Research output: Contribution to journalArticle

Laitner, John ; Silverman, Daniel ; Stolyarov, Dmitriy. / The role of annuitized wealth in post-retirement behavior. In: American Economic Journal: Macroeconomics. 2018 ; Vol. 10, No. 3. pp. 71-117.
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