Portfolio Choice in Retirement: Health Risk and the Demand for Annuities, Housing, and Risky Assets

No 15307, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: 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.

JEL-codes: D91 G11 I10 J26 (search for similar items in EconPapers)
Date: 2009-09
New Economics Papers: this item is included in nep-hea and nep-ure
Note: AG AP EH
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Citations: View citations in EconPapers (98)

Published as Yogo, Motohiro, 2016. "Portfolio choice in retirement: Health risk and the demand for annuities, housing, and risky assets," Journal of Monetary Economics, Elsevier, vol. 80(C), pages 17-34.

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Related works:
Journal Article: Portfolio choice in retirement: Health risk and the demand for annuities, housing, and risky assets (2016)
Working Paper: Portfolio Choice in Retirement: Health Risk and the Demand for Annuities, Housing and Risky Assets (2009)
Working Paper: Portfolio Choice in Retirement: Health Risk and the Demand for Annuities, Housing, and Risky Assets (2008)
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