Market Performance and the Timing of Retirement
Yao, R., & Park, E. (2012). Market performance and the timing of retirement. Journal of Personal Finance, 11(1), 10-48.
41 Pages Posted: 2 Mar 2016
Date Written: 2012
This study is the first to utilize nine interview waves of the Health and Retirement Study and multilevel discrete-time survival analysis to investigate the effect of market returns on individual elective retirement decisions. Individuals who retire at a market peak have an increased risk of shortening the longevity of their retirement income. Unfortunately, market returns were found to have a significant positive effect on the probability of retirement. Researchers, employers, financial educators and financial practitioners should help pre-retirees overcome the stock market’s influence on their decision-making to avoid the negative effect of market sequencing on their retirement wealth.
Keywords: Behavioral finance, Retirement behavior, Market sequencing, Projection bias, Health and Retirement Study
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