This study revisits the retirement-consumption puzzle and finds that consumption decreases at retirement, declining by approximately 10%, even when excluding home production and work-related consumption. The decline in consumption is "L-shaped" and lasts for at least three years. Furthermore, the amount of savings decreases consumption. This study estimates each household’s time preference rate which is strongly correlated with the amount of savings, and divides the data into the subsamples based on those with high and low time preference rates. The subsample analysis reveals that only households with a high time preference rate reduce their consumption at retirement.
