Housing Wealth Management at Retirement

Heilbron, John (2019): Housing Wealth Management at Retirement.

Abstract

This paper estimates the e ect of retirement on the liquidation of housing assets. I use programmatic Social Security eligibility thresholds to instrument for retirement and find that retirement makes a household  12% more likely to issue any new mortgage debt and  3% more likely to extract equity from a home within the following two years. Retirement-induced housing wealth liquidation increases liquid balances to a greater extent than does ordinary housing wealth liquidation; this evidence is consistent with retirement-induced refinancing being a pro-active planning decision rather than a response to adverse expense shocks. Evidence on specific household motives for liquidating housing wealth is mixed.

• Item Type: MPRA Paper
• Language: English
• Keywords: Household Finance, Household Saving, Intertemporal Household Choice
• Subjects: D - Microeconomics > D1 - Household Behavior and Family Economics > D12 - Consumer Economics: Empirical Analysis; D - Microeconomics > D1 - Household Behavior and Family Economics > D14 - Household Saving; Personal Finance

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