Demographic determinants of necessary dissaving among older persons

Because of population aging, many governments are placing greater responsibility on older persons to fund their retirement. Within this context, older persons' financial self-sufficiency during times of stress is important to understand. Using data from the 2002 Australian General Social Survey, this article reports on the prevalence of older persons drawing on financial resources to meet the cost of everyday living expenses when current income is insufficient, identifies the kinds of resources older persons draw on to meet the costs of everyday necessities, and estimates the effects of demographic factors on different necessary dissaving strategies. Results indicate that about 11% of older persons find it necessary to employ some type of dissaving strategy and that the factors associated with asset dissaving differ from the factors associated with liability dissaving. Future research needs to examine the effects of unanticipated events on necessary dissaving and alternative motives for dissaving.