We use comparable data from the U.S. and England to examine similarities and differences in the level and trajectories of assets among households age 70 and older. We find that in the U.S. assets on average decline gradually with age, while in England older households actually accumulate wealth. These differences appear to be driven largely, though not entirely, by housing wealth: During the period we consider, house price growth drove increases in housing wealth in England that more than offset the slow drawdown of nonhousing wealth. This suggests the illiquid nature of housing is likely to be an important factor in explaining wealth drawdown at older ages. We also consider the potential importance of bequest motives and savings to insure against the risk of medical and long-term care expenses.
Authors
CPP Co-Director
Richard is Co-Director of the Centre for the Microeconomic Analysis of Public Policy (CPP) and Senior Research Fellow at IFS.
Gemma Tetlow
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.
Rowena Crawford
Report details
- Publisher
- Michigan Retirement Research Center
Suggested citation
Blundell, R et al. (2016). Comparing retirement wealth trajectories on both sides of the pond. Michigan: Michigan Retirement Research Center. Available at: https://ifs.org.uk/publications/comparing-retirement-wealth-trajectories-both-sides-pond (accessed: 4 May 2024).
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