Explaining why so many people do not save

Lusardi

Annamaria

Lusardi, Annamaria

Author

text

working paper

Chestnut Hill, Mass. Center for Retirement Research at Boston College20012001monographic

Chestnut Hill, Mass.

Center for Retirement Research at Boston College

2001

monographic

Englisheng

English

eng

electronicapplication/pdfborn digital

electronic

application/pdf

born digital

There are vast differences in wealth holdings, even among households in similar age groups. In addition, a large percentage of U.S. households arrive close to retirement with little or no wealth. While many explanations can be found to rationalize these facts, approximately thirty percent of households whose head is close to retirement have done little or no planning for retirement.

Planning is shaped by the experience of other individuals: individuals learn to plan for retirement from older siblings. They also learn from the experience of old parents. In particular, unpleasant events, such as financial difficulties and health shocks at the end of life, provide incentives toward planning. In addition, planning affects wealth levels as well as portfolio choice. Individuals who plan are more likely to hold large amounts of wealth and to invest their wealth holdings in high return assets, such as stocks. Thus, planning plays an important role in explaining the saving behavior of many households.

Annamaria Lusardi.

CRR WP2001-5

CRR WP

2001-5

http://crr.bc.edu/images/stories/Working_Papers/wp_2001-05.pdf

MChBEnglisheng

MChB

Englisheng

English

eng