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Economic Quarterly

Dec. 22, 2020

Transfers to Children Help Explain Retirement-Savings Puzzle

In the latest issue of Economic Quarterly, Richmond Fed researchers cast doubt on the cliché that elderly couples are in a hurry to spend their children’s inheritances.

Economist John Bailey Jones, along with researchers at the Richmond Fed and other institutions, studied changes in assets that occur in the six years preceding elderly people’s deaths. They find that over that period, the assets of households experiencing a death decline significantly more than the assets of their surviving counterparts. Higher medical spending and other end-of-life expenses fully explain the declines for singles but fall short of explaining the declines for couples. The researchers find that transfers from the dying spouse to non-spousal heirs, such as children, are more than sufficient to explain the remainder.

With this issue, the Richmond Fed is retiring Economic Quarterly to focus on more timely research publications, in particular the Bank’s Economic Brief series, which will begin posting additional briefs each month. All issues of Economic Quarterly — spanning 28 years of economic analysis — will remain on the Bank’s website. Information about all of the Richmond Fed’s research publications is available via email or online.


As part of our nation’s central bank, the Richmond Fed is one of 12 regional Reserve Banks working together with the Board of Governors to support a healthy economy and deliver on our mission to foster economic stability and strength. We connect with community and business leaders across the Fifth Federal Reserve District — including the Carolinas, District of Columbia, Maryland, Virginia, and most of West Virginia — to monitor economic conditions, address issues facing our communities, and share this information with monetary and financial policymakers. We also work with banks to ensure they are operating safely and soundly, supply financial institutions with currency that’s fit for distribution, and provide a safe and efficient way to transfer funds through our nation’s payments system.

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