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The Retirement Expectations of Middle-Aged Individuals

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  • Deborah A. Cobb-Clark
  • Steve Stillman

Abstract

We use the first three waves of the Household Income and Labour Dynamics in Australia (HILDA) Survey to examine the retirement plans of middle-aged workers (aged 45-55). Our results indicate that approximately two-thirds of men and more then half of women appear to be making standard retirement plans. At the same time, more than one in five individuals seem to have delayed their retirement planning and approximately one in ten either do not know when they expect to retire or expect to never retire. Retirement plans are closely related to current labor market position. Specifically, forming expectations about the age at which one will leave the labor market appears to be easier for workers in jobs with well defined pension benefits and standard retirement ages. Moreover, those who report that they do not know when they expect to retire do in fact appear to face greater uncertainty in their retirement planning. Those who anticipate working forever seem to do so out of concerns about the adequacy of their retirement incomes rather than out of increased job satisfaction or a heightened desire to remain employed. Finally, men alter their retirement plans in response to labor market shocks, while women are more sensitive to their own and their partners’ health changes.

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Bibliographic Info

Paper provided by Centre for Economic Policy Research, Research School of Economics, Australian National University in its series CEPR Discussion Papers with number 540.

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Date of creation: Dec 2006
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Handle: RePEc:auu:dpaper:540

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Keywords: retirement; expectations; middle-aged workers;

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  1. Arthur van Soest & Michael Hurd, 2004. "Models for Anchoring and Acquiescence Bias in Consumption Data," NBER Working Papers 10461, National Bureau of Economic Research, Inc.
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  10. Lixin Cai & Guyonne Kalb, 2004. "Health Status and Labour Force Participation: Evidence from the HILDA Data," Melbourne Institute Working Paper Series wp2004n04, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
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Cited by:
  1. Deborah A. Cobb‐Clark & Vincent A. Hildebrand, 2011. "Portfolio Allocation In The Face Of A Means‐Tested Public Pension," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 57(3), pages 536-560, 09.
  2. Thomas K. Bauer, & Deborah A. Cobb-Clark & Vincent Hildebrand & Mathias Sinning, 2007. "A Comparative Analysis of the Nativity Wealth Gap," Ruhr Economic Papers 0006, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
  3. Helen Levy & Kristin Seefeldt, 2008. "How Do Lower-Income Families Think about Retirement?," Working Papers wp195, University of Michigan, Michigan Retirement Research Center.
  4. Diana Warren, 2008. "Retirement Expectations and Labour Force Transitions: The Experience of the Baby Boomer Generation," Melbourne Institute Working Paper Series wp2008n24, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
  5. Diana Warren, 2013. "Retirement Decisions of Couples: The Impact of Spousal Characteristics and Preferences on the Timing of Retirement," Melbourne Institute Working Paper Series wp2013n41, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
  6. Sinning, Mathias, 2007. "Wealth and Asset Holdings of Immigrants in Germany," IZA Discussion Papers 3089, Institute for the Study of Labor (IZA).
  7. James Enright & Grant M Scobie, 2010. "Healthy, Wealthy and Working: Retirement Decisions of Older New Zealanders," Treasury Working Paper Series 10/02, New Zealand Treasury.

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