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Concerns about retirement preparation are rooted in Americans’ low saving rate. A common explanation is that people do not earn enough to both pay for their current expenses and save for retirement. Yet even accounting for different levels of income, there is a very wide distribution of household wealth in the original HRS cohort in 1992 (Venti and Wise 2001). A substantial proportion of high-income households have low wealth, and many low-income households have substantial savings. Sociodemographics appear to account for relatively little of the wide dispersion in retirement wealth. Instead, the choice to save and how much to save appears to be the strongest predictor of retirement wealth. Clearly, the decision to save is important for retirement preparation, and understanding what motivates people to save for retirement and to conserve financial resources in retirement is an important goal. Researchers use the HRS to explore a wide range of factors such as the desire to save money in case of poor health and associated OOPM costs. Others study personal characteristics like conscientiousness that may influence saving. Another line of research sug- gests that financial literacy plays an important role in retirement savings. External incentives such as employer-based pension contribution matching can also be important in encouraging retirement savings. Medical Costs Many people recognize that if they live a long time, they may face potentially large medical costs. The risk of poor health and associated medical expenses appears to be a powerful driving force in precautionary saving. Multiple studies using the rich longitudinal information on health conditions, costs and retirement wealth in the HRS demonstrate that these fears are not unfounded. One line of research, using the AHEAD cohort, studies the impact of longevity on saving (De Nardi et al. 2012). HRS contains extensive information on net worth and the value of retirement income sources like Social Security, pensions and annuities. These are used to cal- culate permanent income, a measure of lifetime wealth. For 1993 and 1995, when AHEAD was a separate study focused on an older cohort, the survey contains information on OOPM expenses including insurance premiums, drug costs, doctor and dental visits, and any extra costs for hospital stays and outpatient care. Medical costs rise very rapidly with age, and those with the highest income have very high OOPM expenses. OOPM costs rise from $1,875 (in 2016 dollars) per year for the average 75-year-old to $15,690 at age 95. However, a 95-year-old in the lowest range of permanent income pays only $2,900 in medical expenses, and the top income individual pays $26,945 per year. Those in the top income bracket appear to be very frugal, even at older ages, and the main reason is the desire to be able to pay for these potentially large medical costs. Those with low income and wealth are more likely to rely on government programs like Medicaid and Medicare. Interestingly, Levy (2007) finds that about 23% of the original HRS cohort experience a period of having no health insurance coverage in the six years leading up to age 65, the age of eligibility for Medicare. Fortunately, only 2% of this cohort experience an uninsured hospitaliza- tion during that period. Another study looks at the unfolding impact over time of acute health events and chronic health conditions on the wealth of older adults (Lee and Kim 2008). The development of health conditions leads to wealth depletion. Despite be- ing eligible for Medicare, some individuals appear to self-insure by saving, and spending little, so that they have enough savings to pay for the medical care they want. Similarly, Coile and Milligan (2009) show that health problems lead to significant changes in retire- ment portfolios over time. Ownership rates for principal res- idences, vehicles, financial The choice to save and how much to save appears to be the strongest predictor of retirement wealth. Many people recognize that if they live a long time, they may face potentially large medical costs.