Retirement Savings and Expenditure Patterns of Renters and Homeowners: Different Resources or Different Views?

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This study examines the retirement preparation of renters and homeowners. Housing is commonly the largest asset for consumers and often provides benefits related to retirement such as reduced costs for housing services and the potential for reverse mortgages or other uses of equity. Consequently, the retirement preparation of renters is especially of interest, given their lack of housing equity. We examine two cohorts of renters and homeowners nearing retirement age using ten years of data from the Consumer Expenditure Survey (1995-2004). Although, standard life cycle theory suggests that similarly situated renters will attempt to compensate for the lack of housing equity by investing …