Do People Run Out of Money In Retirement?

What are the chances you will run out of money in retirement? An Employee Benefit Research Institute study determined that 12 percent of older American have no assets of any kind at the time of death. But did they run out money or never have it to begin with?

It's likely they never had it, according to an NBER analysis of how the assets of older Americans change over time. "The level of assets of individuals approaching the end of life is determined primarily by the assets these individuals held many years earlier," the NBER researchers conclude after examining the assets of individuals in the Health and Retirement Study from first observation in 1992 or 1993 until their death. "Most of those with limited assets at death also had limited assets earlier in life. They did not run out of assets in retirement; they never had many assets to begin with."

Source: National Bureau of Economic Research, What Determines End-of-Life Assets? A Retrospective View, Working Paper 21682