to pass on wealth to subsequent generations as well as to cover unforeseen health expenses. Relevant studies Hayashi, Ando, and Ferris investigated whether the elderly save or dissave and found for the United States that families after retirement dissave on average about a third of their peak wealth by the time of death, leaving the rest (mostly their homes) as bequests. In contrast they found that for Japan the elderly forming independent households and those living with children continue to save, for all but the most elderly. From age 80 or more and, also the single elderly of all ages, the dissaving patterns were evident. Later evidence presented by Horioka reinforces the life cycle hypothesis in Japan. Clara Fernström researched whether there is any correlation between the dissaving of a person and the person’s age, gender, marital status, income and the probability of surviving until the following year. Her study shows following results and provides possible explanation as follows: Annual savings increase with lower survival probability. That might be explained by either bequest motives or the low utility rate of consumption for a person with low survival probability. Person with low survival probability is likely to be ill and not able to enjoy the consumption as much as a healthy person, therefore they decide to consume little. People with low income show less dissaving after a shock than people with high income. People with low income usually have low savings, therefore don’t have the possibility to dissave without borrowing. However, people with high savings can choose how much to dissave. People with children save more than childless people, which is explained by wanting to leave a bequest for their offspring. Married individuals save less than the singles. Unlike people with children, there seems to be no visible intent to save for bequest reasons. Moreover, it is possible that the utility rate of consumption is higher for married individuals, as the utility is shared with their spouse. Moreover, single people save more, because they can’t rely financially on their husband or wife. Older people dissave less than younger people, which is probably linked to the fact that older people have generally lower probability of survival. See also Autonomous consumption Debt Retirement spend down References External links Steven Haider, Michael Hurd, Elaine Reardon and Stephanie Williamson, "Patterns of Dissaving in Retirement", AARP, 2000. Personal finance