Optimal Retirement and Saving with Increasing Longevity

29 Pages Posted: 10 Jun 2011

See all articles by Michael Moore

Michael Moore

University of Warwick - Warwick Business School

David E. Bloom

Harvard University - T.H. Chan School of Public Health; National Bureau of Economic Research (NBER)

David Canning

Harvard University - T.H. Chan School of Public Health

Date Written: March 2, 2011

Abstract

We develop a simple life cycle optimizing model of retirement and savings. We show that, in theory, higher incomes lead to earlier retirement and higher savings while longer life spans lead to later retirement and lower savings. We calibrate our model using data from the United States and find that the model predicts that over the last century the effect of rising incomes has been twice as large as the effect of the secular rise in life expectancy.

Keywords: aging, health, retirement, savings

JEL Classification: J26, D91

Suggested Citation

Moore, Michael John and Bloom, David E. and Canning, David, Optimal Retirement and Saving with Increasing Longevity (March 2, 2011). WBS Finance Group Research Paper No. 164, Available at SSRN: https://ssrn.com/abstract=1857565 or http://dx.doi.org/10.2139/ssrn.1857565

Michael John Moore (Contact Author)

University of Warwick - Warwick Business School ( email )

Coventry CV4 7AL
United Kingdom

David E. Bloom

Harvard University - T.H. Chan School of Public Health ( email )

677 Huntington Avenue
Boston, MA MA 02115
United States
617-432-0654 (Phone)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

David Canning

Harvard University - T.H. Chan School of Public Health ( email )

677 Huntington Avenue
Boston, MA MA 02115
United States

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