Saving Behavior and Portfolio Choice After Retirement (2024)

van Ooijen, R., Alessie, R. (2015). Saving Behavior and Portfolio Choice After Retirement. De Economist, 163(3), 353-404. https://doi.org/10.1007/s10645-015-9254-z

van Ooijen, Raun ; Alessie, Rob ; Kalwij, Adriaan. / Saving Behavior and Portfolio Choice After Retirement. In: De Economist. 2015 ; Vol. 163, No. 3. pp. 353-404.

@article{cd35b9b9e9ea4a0c9402c3f952d94911,

title = "Saving Behavior and Portfolio Choice After Retirement",

abstract = "This paper reviews the literature on saving behavior and portfolio choice after retirement and provides a descriptive analysis of this behavior by Dutch elderly households. Studying saving behavior in the Netherlands is informative because of the very different institutional background compared to the US, for which most of the empirical evidence is. In the Netherlands, the generous pension system and almost complete coverage of the public health- and long-term care insurance system makes precautionary saving less necessary. Using detailed administrative data, we present evidence on the extent to which the financial resources of retirees are affected by shocks such as the decease of a spouse or deteriorating health—similar to recent empirical studies by Poterba et al. (Explorations in the economics of aging. University of Chicago Press, Chicago, pp 23–69, 2011; Investigations in the economics of aging. University of Chicago Press, Chicago, pp 21–69, 2012; Discoveries in the economics of aging. University of Chicago Press, Chicago, pp 159–186, 2014) for the US. Moreover, we examine the extent to which retirees who do not experience any shocks are able to keep positive wealth at their disposal and sustain their consumption level during retirement. Our results show that the death of the spouse results in a significant reduction of household wealth compared to surviving couples—which is also found in the US—while health shocks result in higher household savings in old-age due to the almost complete coverage of health care expenditures. Although retirees in the Netherlands face limited uncertainty about health expenditures, our analysis shows that the elderly, on average, keep large amounts of assets even at a very old age. Our findings suggest that (1) the generous pension benefits are protective of household wealth, (2) illiquid housing wealth constrains the decumulation of household wealth, (3) bequests and transfers after the death of the first spouse are important.",

keywords = "Elderly, Portfolio choice, Savings",

author = "{van Ooijen}, Raun and Rob Alessie and Adriaan Kalwij",

year = "2015",

month = oct,

day = "1",

doi = "10.1007/s10645-015-9254-z",

language = "English",

volume = "163",

pages = "353--404",

journal = "De Economist",

issn = "0013-063X",

publisher = "Springer",

number = "3",

}

van Ooijen, R, Alessie, R 2015, 'Saving Behavior and Portfolio Choice After Retirement', De Economist, vol. 163, no. 3, pp. 353-404. https://doi.org/10.1007/s10645-015-9254-z

Saving Behavior and Portfolio Choice After Retirement. / van Ooijen, Raun; Alessie, Rob; Kalwij, Adriaan.
In: De Economist, Vol. 163, No. 3, 01.10.2015, p. 353-404.

Research output: Contribution to journal › Article › Academic › peer-review

TY - JOUR

T1 - Saving Behavior and Portfolio Choice After Retirement

AU - van Ooijen, Raun

AU - Alessie, Rob

AU - Kalwij, Adriaan

PY - 2015/10/1

Y1 - 2015/10/1

N2 - This paper reviews the literature on saving behavior and portfolio choice after retirement and provides a descriptive analysis of this behavior by Dutch elderly households. Studying saving behavior in the Netherlands is informative because of the very different institutional background compared to the US, for which most of the empirical evidence is. In the Netherlands, the generous pension system and almost complete coverage of the public health- and long-term care insurance system makes precautionary saving less necessary. Using detailed administrative data, we present evidence on the extent to which the financial resources of retirees are affected by shocks such as the decease of a spouse or deteriorating health—similar to recent empirical studies by Poterba et al. (Explorations in the economics of aging. University of Chicago Press, Chicago, pp 23–69, 2011; Investigations in the economics of aging. University of Chicago Press, Chicago, pp 21–69, 2012; Discoveries in the economics of aging. University of Chicago Press, Chicago, pp 159–186, 2014) for the US. Moreover, we examine the extent to which retirees who do not experience any shocks are able to keep positive wealth at their disposal and sustain their consumption level during retirement. Our results show that the death of the spouse results in a significant reduction of household wealth compared to surviving couples—which is also found in the US—while health shocks result in higher household savings in old-age due to the almost complete coverage of health care expenditures. Although retirees in the Netherlands face limited uncertainty about health expenditures, our analysis shows that the elderly, on average, keep large amounts of assets even at a very old age. Our findings suggest that (1) the generous pension benefits are protective of household wealth, (2) illiquid housing wealth constrains the decumulation of household wealth, (3) bequests and transfers after the death of the first spouse are important.

AB - This paper reviews the literature on saving behavior and portfolio choice after retirement and provides a descriptive analysis of this behavior by Dutch elderly households. Studying saving behavior in the Netherlands is informative because of the very different institutional background compared to the US, for which most of the empirical evidence is. In the Netherlands, the generous pension system and almost complete coverage of the public health- and long-term care insurance system makes precautionary saving less necessary. Using detailed administrative data, we present evidence on the extent to which the financial resources of retirees are affected by shocks such as the decease of a spouse or deteriorating health—similar to recent empirical studies by Poterba et al. (Explorations in the economics of aging. University of Chicago Press, Chicago, pp 23–69, 2011; Investigations in the economics of aging. University of Chicago Press, Chicago, pp 21–69, 2012; Discoveries in the economics of aging. University of Chicago Press, Chicago, pp 159–186, 2014) for the US. Moreover, we examine the extent to which retirees who do not experience any shocks are able to keep positive wealth at their disposal and sustain their consumption level during retirement. Our results show that the death of the spouse results in a significant reduction of household wealth compared to surviving couples—which is also found in the US—while health shocks result in higher household savings in old-age due to the almost complete coverage of health care expenditures. Although retirees in the Netherlands face limited uncertainty about health expenditures, our analysis shows that the elderly, on average, keep large amounts of assets even at a very old age. Our findings suggest that (1) the generous pension benefits are protective of household wealth, (2) illiquid housing wealth constrains the decumulation of household wealth, (3) bequests and transfers after the death of the first spouse are important.

KW - Elderly

KW - Portfolio choice

KW - Savings

UR - http://www.scopus.com/inward/record.url?scp=84938418160&partnerID=8YFLogxK

U2 - 10.1007/s10645-015-9254-z

DO - 10.1007/s10645-015-9254-z

M3 - Article

AN - SCOPUS:84938418160

SN - 0013-063X

VL - 163

SP - 353

EP - 404

JO - De Economist

JF - De Economist

IS - 3

ER -

van Ooijen R, Alessie R, Kalwij A. Saving Behavior and Portfolio Choice After Retirement. De Economist. 2015 Oct 1;163(3):353-404. doi: 10.1007/s10645-015-9254-z