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What is an adequate standard of living during retirement?


Binswanger, Johannes; Schunk, Daniel (2012). What is an adequate standard of living during retirement? Journal of Pension Economics and Finance, 11(2):203-222.

Abstract

Many economists and policy-makers argue that households do not save enough to maintain an adequate standard of living during retirement. However, there is no consensus on the answer to the underlying question about what this standard should be, despite the fact that it is crucial for the design of saving incentives and pension systems. We address this question with a randomized survey design, individually tailored to each respondent's financial situation, and conducted both in the U.S. and The Netherlands. We find that adequate levels of retirement spending exceed 80% of working life spending for a majority of respondents. Minimum acceptable income replacement rates range from 95 to 45% across income quintiles in the U.S., and from 75 to 60% across income quintiles in The Netherlands. The smaller range in The Netherlands may in part reflect the much tighter income distribution there

Abstract

Many economists and policy-makers argue that households do not save enough to maintain an adequate standard of living during retirement. However, there is no consensus on the answer to the underlying question about what this standard should be, despite the fact that it is crucial for the design of saving incentives and pension systems. We address this question with a randomized survey design, individually tailored to each respondent's financial situation, and conducted both in the U.S. and The Netherlands. We find that adequate levels of retirement spending exceed 80% of working life spending for a majority of respondents. Minimum acceptable income replacement rates range from 95 to 45% across income quintiles in the U.S., and from 75 to 60% across income quintiles in The Netherlands. The smaller range in The Netherlands may in part reflect the much tighter income distribution there

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Additional indexing

Item Type:Journal Article, refereed, original work
Communities & Collections:National licences > 142-005
Dewey Decimal Classification:330 Economics
Language:English
Date:1 April 2012
Deposited On:25 Oct 2018 15:27
Last Modified:24 Sep 2019 23:39
Publisher:Cambridge University Press
ISSN:1474-7472
OA Status:Green
Publisher DOI:https://doi.org/10.1017/s1474747211000618
Related URLs:https://www.swissbib.ch/Search/Results?lookfor=nationallicencecambridge101017S1474747211000618 (Library Catalogue)

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