RT Journal Article
SR Electronic
T1 Do Retirees want Constant, Increasing, or Decreasing Consumption?
JF The Journal of Retirement
FD Institutional Investor Journals
SP jor.2023.1.128
DO 10.3905/jor.2023.1.128
A1 Anqi Chen
A1 Alicia H. Munnell
YR 2023
UL https://pm-research.com/content/early/2023/01/06/jor.2023.1.128.abstract
AB Whether households prefer a constant, increasing, or decreasing path of consumption in retirement has important implications for our understanding of retirement adequacy. Financial planners and researchers often have assumed that retirees would like to maintain their pre-retirement standard of living. However, several studies suggest that retired households decrease their consumption over time. This project builds on the existing literature by: 1) examining retirement consumption over longer periods; 2) using wealth to separate constrained and unconstrained households in order to analyze whether declines in consumption are driven by necessity or preferences; and 3) exploring whether, within unconstrained households, those with steeper mortality profiles are more likely to front-load consumption.