The purpose of this paper is using a questionnaire and experimental methodology to investigate the difference between varied age households who will change their consumption and investment plans when facing their longevity risk. In order to understand the difference of longevity risk awareness in different age households, the participants in this experiment who must be the head of a household, married, and divided thirty, forty and fifty years old into three different age groups. Furthermore, this paper also use the dynamic figure to analyze the change of consumption and investment decisions.
The main findings of this paper are described as follow. (1) Based on “Habit Formation”, households prefer to adjust their investment decisions rather than their consumption decisions in order to deal with longevity risk. Moreover, female households,with highly education level, more children, lower life expectancy, more bequest motivation, lower income, higher health-care expenditure and greater risk aversion tend to reduce their proportion of risky assets with a longevity risk. (2)With the difference of longevity risk awareness between different age households, they have the distinct behavior response to the longevity risk.(3) As for the changing of consumption and investment decisions, thirty year-old households tend to reduce their proportion of risky assets to deal with the longevity risk in whole life. Forty year-old and fifty year-old households tend to reduce their proportion of risk-free assets to deal with the longevity risk before retirement. Further, they tend to increase their risky asset holdings after retirement.