Changing Retirement Behavior in the Wake of the Financial Crisis

Julia L. Coronado and Karen Dynan

Abstract — The financial crisis and ensuing Great Recession left huge scars on household balance sheets, with households approaching retirement seeing the largest decline in wealth. This chapter examines how these households have adjusted to these developments. To date, most evidence on this question has come from surveys of household intentions. Using data on actual household behavior, we find that households nearing retirement are making up for financial losses by increasing saving and deferring retirement. They also appear to have reduced financial risk exposure by taking on less leverage and moving their portfolios in a more conservative direction.Keywords: household portfolios, wealth, retirement, saving, portfolios.