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The Retirement Expectations of Middle-Aged Individuals

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Author Info
Deborah A. Cobb-Clark
Steve Stillman

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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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Publisher Info
Paper provided by Centre for Economic Policy Research, Research School of Social Sciences, 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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Related research
Keywords: retirement; expectations; middle-aged workers;

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Find related papers by JEL classification:
J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
J01 - Labor and Demographic Economics - - General - - - Labor Economics: General
J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Kathryn Anderson & Richard V. Burkhauser & Joseph F. Quinn, 1986. "Do retirement dreams come true? The effect of unanticipated events on retirement plans," Industrial and Labor Relations Review, ILR Review, ILR School, Cornell University, vol. 39(4), pages 518-526, July.
  2. Charles F. Manski, 2004. "Measuring Expectations," Econometrica, Econometric Society, vol. 72(5), pages 1329-1376, 09. [Downloadable!] (restricted)
  3. 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. [Downloadable!]
  4. Alan L. Gustman & Thomas L. Steinmeier, 2001. "Imperfect Knowledge, Retirement and Saving," NBER Working Papers 8406, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  5. Sewin Chan & Ann Huff Stevens, 2002. "How Does Job Loss Affect the Timing of Retirement?," NBER Working Papers 8780, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  6. Guyonne Kalb & Lixin Cai, 2004. "Health status and labour force participation: evidence from HILDA data," Econometric Society 2004 Australasian Meetings 130, Econometric Society.
  7. Debra Sabatini Dwyer & Olivia S. Mitchell, 1998. "Health Problems as Determinants of Retirement: Are Self-Rated Measures Endogenous?," NBER Working Papers 6503, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  8. Hugo Benítez-Silva & Debra S. Dwyer, 2003. "Expectation Formation of Older Married Couples and the Rational Expectations Hypothesis," Working Papers wp062, University of Michigan, Michigan Retirement Research Center. [Downloadable!]
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  9. B. Douglas Bernheim, 1989. "The Timing of Retirement: A Comparison of Expectations and Realizations," NBER Chapters, in: The Economics of Aging, pages 335-358 National Bureau of Economic Research, Inc. [Downloadable!]
    Other versions:
  10. Debra S. Dwyer, 2002. "Planning For Retirement: The Accuracy Of Expected Retirement Dates And The Role Of Health Shocks," Working Papers, Center for Retirement Research at Boston College 2001-08, Center for Retirement Research. [Downloadable!]
  11. Honig, Marjorie, 1998. "Married Women's Retirement Expectations: Do Pensions and Social Security Matter?," American Economic Review, American Economic Association, vol. 88(2), pages 202-06, May. [Downloadable!] (restricted)
  12. Richard Disney & Sarah Tanner, 1999. "What can we learn from retirement expectations data?," IFS Working Papers W99/17, Institute for Fiscal Studies. [Downloadable!]
  13. Jeff Borland, 2005. "Transitions to Retirement: A Review," Melbourne Institute Working Paper Series wp2005n03, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne. [Downloadable!]
  14. Kristin J. Kleinjans & Jinkook Lee, 2006. "The link between individual expectations and savings: Do nursing home expectations matter?," Economics Working Papers 2006-05, School of Economics and Management, University of Aarhus. [Downloadable!]
  15. Soest, A.H.O. van & Hurd, M., 2004. "A test for anchoring and yea-saying in experimental consumption data," Discussion Paper 27, Tilburg University, Center for Economic Research. [Downloadable!]
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  16. Kathleen McGarry, 2002. "Health and Retirement: Do Changes in Health Affect Retirement Expectations?," NBER Working Papers 9317, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  17. Lixin Cai & Guyonne Kalb, 2005. "Health Status and Labour Force Status of Older Working-Age Australian Men," Melbourne Institute Working Paper Series wp2005n09, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne. [Downloadable!]
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  18. Alicia H. Munnell & Robert K. Triest & Natalia A. Jivan, 2004. "How Do Pensions Affect Actual and Expected Retirement Ages?," Working Papers, Center for Retirement Research at Boston College 2004-27, Center for Retirement Research. [Downloadable!]
  19. Alan L. Gustman & Thomas L. Steinmeier, 2001. "Imperfect Knowledge, Retirement and Saving," Working Papers wp012, University of Michigan, Michigan Retirement Research Center. [Downloadable!]
  20. Hugo Benitez-Silva and Debra Dwyer, 2002. "Retirement Expectations Formation Using the Health and Retirement Study," Department of Economics Working Papers 02-04, Stony Brook University, Department of Economics, revised 18 Jun 2002. [Downloadable!]
Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. 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. [Downloadable!]
    Other versions:
  2. Mathias Sinning, 2007. "Wealth and Asset Holdings of Immigrants in Germany," SOEPpapers 59, DIW Berlin, The German Socio-Economic Panel (SOEP). [Downloadable!]
    Other versions:
  3. Helen Levy & Kristin Seefeldt, 2008. "How Do Lower-Income Families Think about Retirement?," Working Papers wp195, University of Michigan, Michigan Retirement Research Center. [Downloadable!]
  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. [Downloadable!]
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