Tag: optimizing behavior
![Hand holding coins in birds nest.](https://crr.bc.edu/wp-content/uploads/2022/11/financing_retirement_4-1536x1024.jpg)
Abstract This paper provides a new examination of the adequacy of households’ saving for retirement. We develop a stochastic, life-cycle simulation model in which people save both for retirement and as a precaution against uncertain future earnings and uncertain lifespan. The model shows that, even among observationally-equivalent households, there will be a distribution of optima…