Intra-Household Portfolio Decision in Retirement: Bargaining Power and Gender Health Differences

This paper investigates how the health-determined bargaining power affects the joint portfolio decision-making of retired households. Data demonstrate a decline in the risky share of married households after retirement, whereas the risky share of single households remains relatively stable. Meantime, wives tend to be younger, healthier, and more risk-averse than husbands. This suggests a potential correlation between health-determined bargaining power dynamics and the household’s portfolio allocation in retirement: as people age, health factors play a more crucial role in determining bargaining power. Consequently, the wife’s bargaining power strengthens, leading the household’s collective portfolio decisions to increasingly reflect her preferences. This dynamic underscores the importance of considering health factors in understanding how joint portfolio decisions are made in retirement. It highlights the potential role of intrahousehold bargaining power in shaping financial outcomes. Realizing this knowledge, policymakers can enhance their ability to better support households’ financial planning and choices during retirement.