Wealth Inequality Among Older Americans

by James P. Smith

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One of the primary objectives of the Asset and Health Dynamics Survey of the Oldest Old (AHEAD) was to monitor the process of asset accumulation and depletion at older ages. Our current knowledge of this process is limited because most social science surveys did not include wealth modules, or assets were notoriously poorly measured in these surveys. This problem is an order of magnitude more severe during the post-retirement years due to woefully inadequate sample sizes in this age group. As a result, we have not yet established convincingly the basic facts around which the scholarly and policy debate should be grounded. Do most older Americans have adequate financial resources to maintain a decent standard of living? Do they deplete their previously accumulated resources as they age as the prominent life-cycle model contends? How many of them plan to leave significant financial bequests to their heirs? To address these questions, this paper examines wealth levels and distributions using the recently released AHEAD survey.

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