b'AGING IN THE 21ST CENTURYCHAPTER 3 | ECONOMIC PREPARATION FOR RETIREMENTIn the ideal retirement scenario, households have sufficient economic resources to maintain or even improve on the lifestyle they had during their working years. Currently, this is feasible for many Americans through a combination of sources including Social Security, employer-provided public and private pensions, and personal savings. HRS research has increased our understanding of the value and importance of each of these resources by addressing a range of questions. What motivates people to save for retirement? What factors affect financial security in retirement? How do households spend or conserve their savings throughout retirement?R esearch on economic readiness for retire-ment focuses on two stages of the life cycle: the accumulation of wealth during working years and the drawdown of wealth during retire-ment. Both aspects influence financial well-being in retirement. On average, many households are well prepared, though some groups are much less so. Public and private programs are influential in decisions about whether to save and how much. Personal factors, such as financial literacy and personality, come into play as well. Spending patterns change before, after, and throughout retirement with health expenditures playing an increasingly larger role at older ages.Ready or Not?Social Security, pensions and private savings comprise the well-known three-legged stool oftend to fall in retirement for a variety of reasons:that individuals should aim to have enough across retirement. Together these sources of income cantax rates are generally lower in retirement; work-all three legs to replace about 70 to 85% of the provide a secure foundation of financial well-related costs diminish or disappear; children areincome they had while workingthough advice being in retirement: none is meant to serve as less of an expense; and people substitute timeregarding the ideal replacement rate varies. the only source. For many people, income needsfor purchased goods. Thus, some experts suggest 50'