The Composition and Draw-Down of Wealth in Retirement

In extending our research on issues related to those in this paper, we have discovered an error in our calculations of the expected present discounted value of life-contingent payout streams in our paper “The Composition and Drawdown of Wealth in Retirement,” published in the Fall 2011 issue of this journal. This error affected entries in Tables 1 and 2 of the paper and the associated discussion. The error overstated the wealth-equivalent value of both Social Security and defi ned benefi t pensions. The corrected values, shown in the tables below, indicate that the average capitalized value of Social Security for all retirementage households is $204,264 rather than $341,556. The mean capitalized value of defi ned benefi t pension payouts is $99,147. Taken together, Social Security and defi ned benefi t pension wealth represent 34.9 percent of the mean value of household wealth, not 46 percent as initially reported. The share of home equity, which was previously reported as 16.8 percent, correspondingly rises to 20.2 percent and

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