This paper addresses whether households save enough for their retirement. For successive date-of-birth cohorts the authors analyze income and expenditure patterns around the time of retirement. They find a fall in consumption as household heads retire which cannot be fully explained by a forward-looking consumption-smoothing model that accounts for expected demographic changes and mortality risk. Controlling for labor-market participation explains part, but not all, of this dip. The authors argue that the only way to reconcile fully the fall in consumption with the life-cycle hypothesis is with the systematic arrival of unexpected adverse information.
Authors
![James Banks](/sites/default/files/styles/square_desktop/public/2022-06/James_Banks.jpg?itok=EvmV7fKj)
James Banks
CPP Co-Director
James is Senior Research Fellow and Professor of Economics at Manchester, working on broad issues in the economics of retirement, savings and health.
![Richard Blundell](/sites/default/files/styles/square_desktop/public/2024-03/Richard%20Blundell%20Head.jpg?itok=ow7e9OkA)
Richard Blundell
CPP Co-Director
Richard is Co-Director of the Centre for the Microeconomic Analysis of Public Policy (CPP) and Senior Research Fellow at IFS.
![Person graphic](/sites/default/files/styles/square_desktop/public/2022-06/IFS-person-graphic.png?itok=hWCtTSrz)
Tanner, Tanner
Journal article details
- Publisher
- American Economic Association
- Issue
- September 1998
Suggested citation
J, Banks and R, Blundell and T, Tanner. (1998). 'Is there a retirement savings puzzle?' (1998)
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