(UM09-05) - Buffering Shocks to Well-Being Late in Life
Matthew D. Shapiro
Long lifetimes expose retirees to increasing risks of shocks to their well-being, including shocks to health and the ability to live independently. These risks loom at least as large as rate-of-return and longevity risks. This research will use the Health and Retirement Study to examine how retirees alter the composition of consumption and use the value of their homes to buffer against these shocks. By comparing retirees who live mainly on Social Security to those with substantial home equity and other assets, this research will separate the direct effect of these shocks on consumption demand from their pecuniary consequences.