Skip to main content

Why Do Couples and Singles Save During Retirement?

Institute Working Paper 49 | Published May 25, 2021

Download PDF


Mariacristina De Nardi Consultant, Institute
Eric French Senior Scholar
John Bailey Jones Federal Reserve Bank of Richmond
Rory McGee University of Western Ontario and IFS
Why Do Couples and Singles Save During Retirement?


While the savings of retired singles tend to fall with age, those of retired couples tend to rise. We estimate a rich model of retired singles and couples with bequest motives and uncertain longevity and medical expenses. Our estimates imply that while medical expenses are an important driver of the savings of middle-income singles, bequest motives matter for couples and high-income singles, and generate transfers to non-spousal heirs whenever a household member dies. The interaction of medical expenses and bequest motives is a crucial determinant of savings for all retirees. Hence, to understand savings, it is important to model household structure, medical expenses, and bequest motives.