(UM04-13) - Changes in Consumption and Activities in Retirement
Michael Hurd and Susann Rohwedder
Prior research has found that consumption drops at retirement, and it has interpreted the drop as resulting from a failure to save adequately due to a lack of forward-looking behavior. Our research will compare the change in consumption at retirement in panel data with anticipated changes, and will examine whether the substitution of home production for market purchases can explain any drop in consumption. Besides providing evidence about the retirement-consumption puzzle and any associated change in self-assessed well-being at retirement, these findings will suggest whether policy can successfully encourage more planning for retirement and more pre-retirement saving.