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 108AGING IN THE 21S T CENTURY 56 All three groups of women in the Lee and Rowley study hold rela- tively low proportions of their net worth in stocks, bonds, CDs/ Tbills, IRAs and other investments. This can have a nega- tive impact on wealth accumulation. Hogan and Perrucci (2007) find that women in poor health are least likely to hold adequate risk in their financial portfolios. Earning less than a high school degree is associated with a low-risk port- folio. Black women are 68% less likely to hold a well-balanced portfolio than White women. Other forces contribute to worse retirement prospects for Black women as well. Even after accounting for employment earnings and the decision to retire, Black women in the HRS receive the lowest level of retirement income. Some of the wealth differences between men and women at retirement may be the result of women’s lower level of risk tolerance. Using ques- tions in the HRS from 2006 about participants’ willingness to gamble their money, Neelakantan and Chang (2010) show that lower willingness to gamble — being more risk averse — is associated with lower wealth accumulation at retirement. Women are indeed more risk averse than men, and there is a negative association between risk aversion and wealth. This association is most pronounced for the wealthiest households. Interestingly, for households with very low wealth, being risk averse is actually positively associated with wealth. If there were no gender dif- ference in risk aversion, the wealth gap between men and women would diminish. Women also tend to report lower levels of financial knowledge (Lusardi and Mitchell 2008), which may help explain their lower inclination to gamble with finances. Babiarz et al. (2012) use couples data from 1992 through 2004 to study the effect of house- hold bargaining power on wealth accumulation. In the HRS, couples in married or partnered households are asked to say who is the more fi- nancially knowledgeable. That person is designat- ed as the financial respondent for the interview and answers all financial questions on behalf of the household. Sixty-seven percent of husbands or male partners are designated as the financial respondent. Participants are also asked who has the final say in financial decisions. Forty-four percent of households say they both have an equal say in major financial decisions, but 35% disagree about who has the final say. Sixteen percent agree that husbands have the final say, but only 5% agree that the wife has the final say. For the purposes of this study, being the financial respondent, having the final say in financial decisions, and having higher income together comprise an index of bargaining power. Spouses with bargaining power are less likely to experience declines in their living standard at widowhood. The Changing Pension Landscape The most striking feature of the pension land- scape over the last 40 years is the ongoing shift from defined benefit (DB) to defined contribution (DC) plans. Traditional DB pensions depend pri- marily on employees’ years of service and salary. On the other hand, DC plan benefits depend on how much employers and employees contribute to investment funds, how long the funds are invest- ed, and how well they do. Will the change from DB to DC pensions leave retirees less financially prepared? Poterba et al. (2007) find that DC plans generate more wealth on average than private sector DB plans, but not more than public sector DB plans, which tend to have more generous plan provisions. A relatively small fraction of workers remain with firms long enough, often 30 years, to qualify for DB pensions, however. If there were no gender difference in risk aversion, the wealth gap between men and women would diminish. Will the change from defined benefit to defined contribution pensions leave retirees less financially prepared?