Efficient Timing of Retirement
AbstractThis study introduces a retirement decision into the class Merton model. A familiar result is that you should retire if and when the marginal utility of another year's wages is equal to the disutility of work.A new result is that at the point of retirement your exposure to risky assets should not jump. Under power utility and constant time preference, the retirement timing problem has a closed form solution; the nine inputs to the formula in question give rise to nine comparative-static results on retirement timing. Further specialization of preference, to log consumption utility and zero time preference, reduces the required number of inputs to four. (Copyright: Elsevier)
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Bibliographic InfoArticle provided by Elsevier for the Society for Economic Dynamics in its journal Review of Economic Dynamics.
Volume (Year): 3 (2000)
Issue (Month): 4 (October)
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Other versions of this item:
- Geoffrey H. Kingston, 2001. "Online Appendix to Efficient Timing of Retirement," Technical Appendices kingston00, Review of Economic Dynamics.
- Kingston, G, 1997. "Efficient Timing of Retirement," Papers 97/01, New South Wales - School of Economics.
- Kingston, Geoffrey H., 1999. "Efficient Timing of Retirement," Working Papers 03, University of Sydney, School of Economics.
- E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
- G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
- J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
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