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Crash and Wait? The Impact of the Great Recession on the Retirement Plans of Older Americans

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  • Brooke Helppie McFall

Abstract

This study uses data from pre- and post-crash surveys from the Cognitive Economics study to examine the impact of recent stock and labor market wealth losses on the planned retirement ages of older Americans. Regression estimates imply that the average wealth loss between July 2008 and May/June 2009 is associated with an increase in planned retirement age of approximately 2.5 months. Furthermore, pessimism about future stock market returns is found to amplify the impact of wealth losses on retirement timing.

Suggested Citation

  • Brooke Helppie McFall, 2011. "Crash and Wait? The Impact of the Great Recession on the Retirement Plans of Older Americans," American Economic Review, American Economic Association, vol. 101(3), pages 40-44, May.
    • Handle: RePEc:aea:aecrev:v:101:y:2011:i:3:p:40-44
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    References listed on IDEAS

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    1. Purvi Sevak, 2002. "Wealth Shocks and Retirement Timing: Evidence from the Nineties," Working Papers wp027, University of Michigan, Michigan Retirement Research Center.
    2. Michael D. Hurd & Monika Reti, 2001. "The Effects of Large Capital Gains on Work and Consumption Evidence from Four Waves of the HRS," Working Papers DRU-3011, RAND Corporation.
    3. Alan L. Gustman & Thomas L. Steinmeier & Nahid Tabatabai, 2010. "What the Stock Market Decline Means for the Financial Security and Retirement Choices of the Near-Retirement Population," Journal of Economic Perspectives, American Economic Association, vol. 24(1), pages 161-182, Winter.
    4. Courtney C. Coile & Phillip B. Levine, 2006. "Bulls, Bears, and Retirement Behavior," ILR Review, Cornell University, ILR School, vol. 59(3), pages 408-429, April.
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