Wharton Pension Research Council Working Papers

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Working Paper

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Recent economic conditions have vastly changed the retirement landscape as a lengthy period of low interest rates have made building wealth for retirement harder and the risk of depleting wealth during the decumulation phase of retirement greater than at any time in recent history. The retirement environment presents challenges, over (i) the period for which interest rate remain low, and (ii) once interest rates appreciably increase--as fixed income assets then decrease in value. This paper addresses two related topics: first, how have households responded to the current low interest rate environment and second, are there alternative responses or investments which households might do well to consider? Beginning with the first topic: we employ the HRS to first investigate impacts of the 2008 – 2014 low interest rate impacts on savings, wealth and asset allocation both ahead of and while in retirement. As well as employing a full sample we report on the responses of the subset of households who have been relatively successful at building and preserving wealth over this period. Following this analytic work we consider alternative portfolio and wealth management strategies targeting increases in equities and delayed participation in Social Security in terms of their potential to add value in persistent low return environments.


The published version of this Working Paper may be found in the 2018 publication: How Persistent Low Returns Will Shape Saving and Retirement.

Working Paper Number


Copyright/Permission Statement

All findings, interpretations, and conclusions of this paper represent the views of the author(s) and not those of the Wharton School or the Pension Research Council. © 2017 Pension Research Council of the Wharton School of the University of Pennsylvania. All rights reserved.

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Economics Commons



Date Posted: 13 February 2019