Early Retirement Pension Benefits

23 Pages Posted: 12 Apr 2004

See all articles by Jeremy Bulow

Jeremy Bulow

Stanford University; National Bureau of Economic Research (NBER)

Date Written: April 1981

Abstract

Early retirement options alter the accrual of pension benefits, increasing the fraction of total benefits accrued in the early years of work. This is true regardless of whether de facto no worker exercises the early retirement option. No currently used actuarial method correctly calculates the cost of an early retirement option. Early retirement options must be considered in calculating age/compensation profiles. Furthermore, the early retirement option can effectively be used to encourage less productive older workers to retire, without the firm having to reduce the nominal salary of such workers.

Suggested Citation

Bulow, Jeremy I., Early Retirement Pension Benefits (April 1981). NBER Working Paper No. w0654, Available at SSRN: https://ssrn.com/abstract=275404

Jeremy I. Bulow (Contact Author)

Stanford University ( email )

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