Hatcher, 1997

Hatcher, C. B. (1997). A model of desired wealth at retirement, Financial Counseling and Planning, 8(1), 57-64.

A Model Of Desired Wealth At Retirement

Charles B. Hatcher(1)

This paper illustrates and executes a strategy for estimating the amount of wealth at which a person
will retire. The concept of permanent income is used to frame the retirement decision as one where you
retire when your full wealth can afford you your desired consumption. Recently retired individuals
from the 1983, 1986 and 1989 Survey of Consumer Finances are used to predict what observable
characteristics in a household determine this threshold, or “reservation” wealth level. These
estimations include several simulations.

Key Words: Life-cycle model, Labor-force participation, Retirement, Survey of Consumer Finances,

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1. Charles B. Hatcher, Assistant Professor, Department of Housing and Consumer Economics, Dawson Hall, The University of Georgia, Athens, GA
30602-3622. Phone: (706)542-4922. Fax:(706)542-4397. E-mail: CHATCHER@hestia.fcs.uga.edu

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