Page 1 Page 2 Page 3 Page 4 Page 5 Page 6 Page 7 Page 8 Page 9 Page 10 Page 11 Page 12 Page 13 Page 14 Page 15 Page 16 Page 17 Page 18 Page 19 Page 20 Page 21 Page 22 Page 23 Page 24 Page 25 Page 26 Page 27 Page 28 Page 29 Page 30 Page 31 Page 32 Page 33 Page 34 Page 35 Page 36 Page 37 Page 38 Page 39 Page 40 Page 41 Page 42 Page 43 Page 44 Page 45 Page 46 Page 47 Page 48 Page 49 Page 50 Page 51 Page 52 Page 53 Page 54 Page 55 Page 56 Page 57 Page 58 Page 59 Page 60 Page 61 Page 62 Page 63 Page 64 Page 65 Page 66 Page 67 Page 68 Page 69 Page 70 Page 71 Page 72 Page 73 Page 74 Page 75 Page 76 Page 77 Page 78 Page 79 Page 80 Page 81 Page 82 Page 83 Page 84 Page 85 Page 86 Page 87 Page 88 Page 89 Page 90 Page 91 Page 92 Page 93 Page 94 Page 95 Page 96 Page 97 Page 98 Page 99 Page 100 Page 101 Page 102 Page 103 Page 104 Page 105 Page 106 Page 107 Page 108CH APTER 2 53 boom such as that experienced in the late 1990s can raise the likelihood of retirement by about 3 percentage points per year for people near retirement age, and that the effect continues for several years. On the other hand, the researchers note, a stock market collapse of similar magni- tude to the boom of the 1990s would produce a roughly equivalent reaction in the opposite direc- tion. The investigators also found that the impact of a market boom is likely to be moderated by other factors, the most important being that many people nearing retirement age have rather limited assets overall in terms of savings or defined- contribution pension wealth (see Chapter 3). Other studies also have attempted to isolate certain effects of stock market changes on retirement behavior and well-being. One analysis compared retirement expectations as stated by HRS participants in 1992 with actual retirement behavior by the year 2000 (Coronado and Perozek 2003). After controlling for a number of interven- ing factors, the study concluded that the run-up in stock market prices during the 1990s induced HRS stockholders to retire about 7 months earlier than those who did not own equities. Another investigation focused on 2000 to 2002, a period when stock prices declined substantially (Kezdi and Sevak 2004). Combining HRS data with Current Population Survey data, the investigators found that households reduced their food con- sumption in response to the decline in wealth. Retirement and Consumption Studies in the United States and the United King- dom have shown that reduced household spend- ing at ages associated with retirement is greater than predicted by standard economic theory. This leads to the question of whether households realistically anticipate their retirement consump- tion needs or are forced to lower their living standards beyond their expectations. Using 2000 HRS data and information from a special 2001 HRS Consumption module, Hurd and Rohwedder (2004) compared expected and actual changes in spending at retirement. They found that most people expect their spending declines to be greater than they actually are (Table 2-6). In other words, people on average seem to be pleasantly TBL. 2-6 Expected and Actual changes in Retirement Spending: 2000-2001 Source: Hurd and Rohwedder 2004. Expected Changes Before Retirement Actual Changes After Retirement Trips, Travel, or Vacation Decrease 38.5% 44.7% Same 32.5 30.4 Increase 29.0 24.9 Clothing Decrease 65.2 60.5 Same 32.8 32.9 Increase 1.9 6.6 Eating Out/ Food & Beverages Decrease 52.5 40.4 Same 38.6 36.3 Increase 8.8 23.3 New Home, Home Repairs, or Household Items Decrease 53.2 37.1 Same 39.4 45.5 Increase 7.4 17.4 Entertainment, Sports, and Hobbies Decrease 46.4 44.4 Same 40.4 45.0 Increase 13.2 10.6 Automobile Expenses Decrease 45.1 29.4 Same 47.3 51.0 Increase 7.6 19.6 surprised by their level of retirement resources, relative to pre-retirement worries about the ad- equacy of retirement income. Enjoyment of Retirement Previous studies have indicated that retired peo- ple report more loneliness and unhappiness than