The role of health shocks after age 70 on housing and wealth profiles.

We conduct a novel investigation into the effects of uncertain health shocks and medical costs on the life cycle consumption, housing, and saving decisions. Our model aids in understanding the role of health shocks and medical costs after age 70 in explaining the lack of wealth and housing decumulation during retirement. We utilize a comprehensive life-cycle model that includes housing, as well as shocks to house price, labor income, and health.