TY - JOUR
T1 - Portfolio choice in retirement
T2 - Health risk and the demand for annuities, housing, and risky assets
AU - Yogo, Motohiro
N1 - Publisher Copyright:
© 2016 Elsevier B.V.
PY - 2016/6/1
Y1 - 2016/6/1
N2 - In a life-cycle model, a retiree faces stochastic health depreciation and chooses consumption, health expenditure, and the allocation of wealth between bonds, stocks, and housing. The model explains key facts about asset allocation and health expenditure across health status and age. The portfolio share in stocks is low overall and is positively related to health, especially for younger retirees. The portfolio share in housing is negatively related to health for younger retirees and falls significantly in age. Finally, out-of-pocket health expenditure as a share of income is negatively related to health and rises in age.
AB - In a life-cycle model, a retiree faces stochastic health depreciation and chooses consumption, health expenditure, and the allocation of wealth between bonds, stocks, and housing. The model explains key facts about asset allocation and health expenditure across health status and age. The portfolio share in stocks is low overall and is positively related to health, especially for younger retirees. The portfolio share in housing is negatively related to health for younger retirees and falls significantly in age. Finally, out-of-pocket health expenditure as a share of income is negatively related to health and rises in age.
KW - Aging
KW - Asset allocation
KW - Life-cycle model
KW - Medical expenditure
KW - Saving
UR - http://www.scopus.com/inward/record.url?scp=84968735839&partnerID=8YFLogxK
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U2 - 10.1016/j.jmoneco.2016.04.008
DO - 10.1016/j.jmoneco.2016.04.008
M3 - Article
C2 - 27766005
AN - SCOPUS:84968735839
SN - 0304-3932
VL - 80
SP - 17
EP - 34
JO - Journal of Monetary Economics
JF - Journal of Monetary Economics
ER -