Retirement as a hedge
AbstractThis paper explores the effect of letting individuals choose their retirement age in a world of uncertainty where there exist both defined benefit (DB) and de?ned contribution (DC) pension plans. The paper shows that giving individuals the flexibility to determine when to retire is an important tool for them when they are hedging against future uncertainty. It also finds that it is preferable to let people make their retirement decision after rather than before the uncertainty is lifted. Finally, it shows that shifting from DB to DC plans fosters the rate of activity of elderly workers.
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Bibliographic InfoPaper provided by Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) in its series CORE Discussion Papers with number 2009043.
Date of creation: 01 Jul 2009
Date of revision:
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retirement decision; defined benefit defined contribution;
Find related papers by JEL classification:
- H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
- J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
This paper has been announced in the following NEP Reports:
- NEP-AGE-2010-03-28 (Economics of Ageing)
- NEP-ALL-2010-03-28 (All new papers)
- NEP-LAB-2010-03-28 (Labour Economics)
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- Jan Bonenkamp & Yvonne Adema & Lex Meijdam, 2011.
"Retirement Flexibility and Portfolio Choice,"
CPB Discussion Paper
182, CPB Netherlands Bureau for Economic Policy Analysis.
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