Wealth Distribution and Retirement Preparation Among Early Savers

Volz, Alice Henriques; Jacobs, Lindsay; Llanes, Elizabeth; Moore, Kevin B.; Thompson, Jeffrey P.

doi:10.17016/feds.2020.043

Cited by 5 publications

(19 citation statements)

References 29 publications

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“…Assets include all financial assets and nonfinancial assets, which includes defined contribution pensions but not definedbenefit pensions. Jacobs et al (2020) has extended the SCF wealth to include these components. Liabilities include mortgages, credit card balances, student loans, automobile loans, and other miscellaneous forms of debt.…”

Section: The Survey Of Consumer Financesmentioning

confidence: 99%

Inequality in 3‐D: Income, Consumption, and Wealth

Fisher

Johnson

Smeeding

et al. 2021

Review of Income and Wealth

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We do not need to and should not have to choose amongst income, consumption, or wealth as the superior measure of well-being. All three individually and jointly determine well-being. We are the first to study inequality in three conjoint dimensions for the same households, using income, consumption, and wealth from the 1989-2016 Surveys of Consumer Finances (SCF). The paper focuses on two questions. What does inequality in two and three dimensions look like? Has inequality in multiple dimensions increased by less, by more, or by about the same as inequality in any one dimension? We find an increase in inequality in two dimensions and in three dimensions, with a faster increase in multi-dimensional inequality than in one-dimensional inequality. Viewing inequality through one dimension greatly understates the level and the growth in inequality in two and three dimensions. The U.S. is becoming more economically unequal than is generally understood.

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Section: The Survey Of Consumer Financesmentioning

confidence: 99%

Inequality in 3‐D: Income, Consumption, and Wealth

Fisher

Johnson

Smeeding

et al. 2021

Review of Income and Wealth

View full text Add to dashboard Cite

show abstract

“…For example, one could ask, "as of a given age prior to retirement, how does projected retirement readiness vary within and across generations?" This sort of question is appropriately answered using expected values for SSW (and DB pension benefits) as of retirement age (Jacobs, et al, 2019 (Sabelhaus and Volz, 2019).…”

Section: Expected and Termination Social Security Wealthmentioning

confidence: 99%

Social Security Wealth, Inequality, and Lifecycle Saving

Sabelhaus¹,

Volz²

2020

Self Cite

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Wealth inequality in the US is high and rising, but Social Security is generally not considered in those wealth measures. Social Security Wealth (SSW) is the present value of future benefits that an individual will receive less the present value of future taxes they will pay. When an individual enters the labor force, they generally face a lifetime of taxes to pay before they will receive any benefits, and thus their initial SSW is generally low or negative. As an individual works and pays into the system their SSW grows and generally peaks somewhere around typical Social Security benefit claim ages. The accrual of SSW over the working life is most important for lower-income workers because the progressive Social Security benefit formula means that taxes paid while working are associated with proportionally higher benefits in retirement. We estimate SSW for individuals in the Survey of Consumer Finances (SCF) for 1995 through 2016 and use a pseudopanel approach to empirically demonstrate those lifecycle patterns. We also show that including SSW in a comprehensive wealth measure generally reduces estimated levels of wealth inequality but does not reverse the upward trend in top wealth shares.

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Section: Expected and Termination Social Security Wealthmentioning

confidence: 99%

Social Security Wealth, Inequality, and Life-cycle Saving: An Update

Sabelhaus

Volz

2020

SSRN Journal

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Social Security wealth (SSW) is the present value of future benefits an individual will receive less the present value of future taxes they will pay. When an individual enters the labor force, they generally face a lifetime of taxes to pay before they will receive any benefits and, thus, their initial SSW is generally low or negative. As an individual works and pays into the system their SSW grows and generally peaks somewhere around typical Social Security benefit claiming ages. The accrual of SSW over the working life is most important for lower income workers because the progressive Social Security benefit formula means that taxes paid while working are associated with proportionally higher benefits in retirement. We estimate SSW for individuals in the Survey of Consumer Finances (SCF) for 1995 through 2019 using detailed labor force history and expectations modules. We use a pseudo-panel approach to empirically demonstrate life-cycle patterns of SSW accumulation and drawdown. We also show that including SSW in a comprehensive wealth measure generally reduces estimated levels of U.S. wealth inequality, but does not reverse the upward trend in top wealth shares.

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Wealth Distribution and Retirement Preparation Among Early Savers

Cited by 5 publications

References 29 publications

Inequality in 3‐D: Income, Consumption, and Wealth

Inequality in 3‐D: Income, Consumption, and Wealth

Social Security Wealth, Inequality, and Lifecycle Saving

Social Security Wealth, Inequality, and Life-cycle Saving: An Update

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