Archive: Irena Dushi
The brief’s key findings are: When kids fly the coop, parents have extra money on hand. The question is do they spend it or save it for retirement? Spending the extra money means fewer resources at retirement and a higher standard of living to target; saving it means more resources and a lower target. Using…
Abstract Much of the disagreement over whether households are adequately prepared for retirement reflects differences in assumptions regarding the extent to which consumption declines when the kids leave home. If consumption declines substantially when the kids leave home, as some life-cycle models of retirement saving assume, households need to achieve lower replacement rates in retirement…
