Are Americans Saving "Optimally" for Retirement?

We incorporate detailed HRS data on family structure and age of retirement (treating both as exogenous and known from the beginning of working life) in calculating optimal life-cycle consumption profiles. Households form expectations about social security based on a detailed representation of social security rules. Expectations about defined benefit pension benefits are based on empirical predictions of pension entitlements (for those eligible to receive benefits) that are a function of final-year earnings. Earnings expectations come from age-earnings profiles estimated using restricted access social security earnings records, incorporating an individual-specific term. Finally, our analysis examines all households in the HRS.