Old‐Age Saving in a Welfare State

ABSTRACT We address the reasons why retirees continue saving well into old age. We contribute to the literature by studying the saving behavior of retirees in a country where health care is free of charge as well as nursing homes. This removes some of the precautionary motive for saving, leaving the bequest motive and other inter‐generational transfers, which are the focus of our study. It is shown that saving remains positive in retirement and depends on children, their income, and their saving. The saving rate drops upon the death of a spouse, suggesting a transfer of wealth to children.