This study examines how U.S. retired households and households approaching retirement change their equity holdings over time. Applying a decomposition analysis on the repeated cross-sectional U.S. Survey of Consumer Finances from 1989 to 2004, this study presents the effects of change in population size including mortality, change in financial wealth, and change in preference on the change in aggregate financial asset share invested in equity. A formal regression-based decomposition is also provided. It was found that there is a convex relationship between age and equity holdings as a share to financial assets for the older population. In addition, the risk-taking attitude-equity holdings profile shifted upward during the period of 1989 to 2004 for the older population. It is further documented that 70% of those senior equity investors chose financing retirement and financing future liquidity as the primary saving goals. Therefore, longevity pattern plays an important role for older population to hold equity.
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