Realistic versions of the buffer stock model with finite horizons and declining in- come after retirement limit considerably the age-range of buffer stock behavior. Car- roll (1997) shows that buffer stock behavior emerges until roughly age 50, and that afterwards people start to accumulate wealth steadily to prepare for retirement. Other models of intertemporal choice deliver different predictions about the correlation be- tween income and consumption and the age-wealth profile during the life-cycle. In the standard life-cycle model without uncertainty, the individual wealth-income ratio is not stationary because consumers save each year until retirement. Hubbard, Skinner and Zeldes (1995) use numerical methods to analyze the properties of a.
