Pension savings and consumption needs of current and future retirees

Population aging and the financial crisis have raised concerns about the sustainability of our pension and health care system (‘AWBZ’). Public and private pensions have become less generous, the costs of long term care are increasing and house prices are decreasing. Currently, these developments have raised a lot of discussion about the financial position of current and future retirees in relationship with proposed pension reforms. In this project we therefore plan to investigate the level, distribution and uncertainty of current and future retirement income in the Netherlands using several administrative datasets and a microsimulation model. In addition, we assess the amount of financial resources Dutch households need during retirement and whether they are adequately prepared for retirement. To accomplish this, we study household consumption, savings and retirement decisions (in response to proposed policy reforms). Furthermore, we investigate the importance of the bequest motive and precautionary saving motive, and the correlation between long life and the costs for long term care. This is crucial to guide innovations in household finances (e.g. combined products to insure long life and disability), and also for public policy in the areas of (long term) health care and optimal taxation. Using structural models we are able to investigate the effects of reforms regarding the generosity of pensions and the financing of the long term care (‘AWBZ’) system on household consumption and saving behavior.

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Netspar, Network for Studies on Pensions, Aging and Retirement, is a thinktank and knowledge network. Netspar is dedicated to promoting a wider understanding of the economic and social implications of pensions, aging and retirement in the Netherlands and Europe.


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