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While the savings of retired singles tend to fall with age, those of retired couples tend to rise. We estimate a rich model of retired singles and couples with bequest motives and uncertain longevity and medical expenses. Our estimates imply that while medical expenses are an important driver of the savings of middle-income singles, bequest motives matter for couples and high-income singles, and generate transfers to non-spousal heirs whenever a household mem-ber dies. The interaction of medical expenses and bequest motives is a crucial determinant of savings for all retirees. Hence, to understand savings, it is important to model household structure, medical expenses, and bequest motives.
Authors
CPP Co-Director
Eric is the Montague Burton Professor of Industrial Relations and Labour Economics at the University of Cambridge and Professor of Economics at UCL.
Research Fellow University of Minnesota and Federal Reserve Bank of Minneapolis
Mariacristina is an Research Fellow at the IFS and also a Professor in the Economics Department at the University of Minnesota.
John Bailey Jones
Research Associate University of Western Ontario
Rory is a Research Associate at the IFS and an Assistant Professor in the Department of Economics at the University of Western Ontario.
Working Paper details
- DOI
- 10.1920/wp.ifs.2021.1221
- Publisher
- Institute for Fiscal Studies
Suggested citation
Bailey Jones, J et al. (2021). Why do couples and singles save during retirement?. London: Institute for Fiscal Studies. Available at: https://ifs.org.uk/publications/why-do-couples-and-singles-save-during-retirement (accessed: 20 April 2024).
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