| How Do Pensions Affect Expected and Actual Retirement Ages? |
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WP#2004-27 AbstractThis paper uses the first six waves of the Health and Retirement Study to investigate the impact of pensions on expected retirement age, on the probability of being retired in each wave given employment in the previous wave, and on the probability of retiring earlier than planned. Pension coverage per se and the type of pension are important in each case. Pension wealth reduces the expected retirement age by 0.6 year, and the incentives in defined benefit plans lower the expected age by another 1.1 years. Pension wealth increases the probability of retiring in a given wave, and pension accruals reduce the probability. Other characteristics of defined benefit plans, as measured by the pension dummy, further raise the probability of being retired. Finally, with regard to the probability of retiring earlier than planned, a change in defined contribution wealth increases the probability, but pension coverage per se reduces it. That is, those with pensions tend to be more accurate planners than those without. For executive summary in PDF For full paper in PDF Alicia H. Munnell is the Director of the Center for Retirement Research (CRR) and the Peter F. Drucker Professor of Management Sciences at Boston College’s Carroll School of Management. Natalia A. Jivan is a graduate student at Boston College and a research associate at the Center. Robert K. Triest is Assistant Vice President and Economist at the Federal Reserve Bank of Boston. The research reported herein was performed pursuant to a grant from the U.S. Social Security Administration (SSA) to the Center for Retirement Research at Boston College (CRR). The opinions and conclusions are solely those of the authors and should not be construed as representing the opinions or policy of SSA or any agency of the Federal Government or the CRR. |