Wharton Pension Research Council Working Papers

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Working Paper

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This chapter documents the trends in the life-cycle profiles of net worth and housing equity between 1983 and 2004. Older households’ net worth rose significantly during the housing boom of recent years. Yet net worth grew by more than housing equity, in part because other assets also appreciated at the same time. Moreover, the younger elderly offset rising house prices by increasing their housing debt and used some of the proceeds to invest in other assets. We consider how much of their housing equity older households could actually tap using reverse mortgages. We show that this fraction is lower at younger ages, such that young retirees can consume less than half of their housing equity. Our results imply that consumable net worth is smaller than standard calculations of net worth.


The published version of this Working Paper may be found in the 2008 publication: Recalibrating Retirement Spending and Saving.


net worth, housing, equity, housing prices, debt

Working Paper Number


Copyright/Permission Statement

All findings, interpretations, and conclusions of this paper represent the views of the authors and not those of the Wharton School or the Pension Research Council. © 2007 Pension Research Council of the Wharton School of the University of Pennsylvania. All rights reserved.


The authors are grateful for funding in part by the Zell-Lurie Real Estate Center at Wharton. Igar Fuki provided outstanding research assistance. We thank John Ameriks, Julia Coronado, and Olivia S. Mitchell for helpful comments.

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Economics Commons



Date Posted: 16 December 2019