Baby Boomer retirement security: The roles of planning, financial literacy, and housing wealth$

We compare wealth holdings across two cohorts of the Health and Retirement Study: the early Baby Boomers in 2004, and individuals in the same age group in 1992. Levels and patterns of total net worth have changed relatively little over time, though Boomers rely more on housing equity than their predecessors. Most important, planners in both cohorts arrive close to retirement with much higher wealth levels and display higher financial literacy than non-planners. Instrumental variables estimates show that planningbehavior can explain the differences in savings and why some people arrive close to retirement with very little or no wealth. r 2007 Elsevier B.V. All rights reserved