Inconsistent Retirement Timing

63 Pages Posted: 11 May 2016 Last revised: 19 Jan 2022

See all articles by Christoph Merkle

Christoph Merkle

Aarhus University

Philipp Schreiber

University of Esslingen

Martin Weber

University of Mannheim - Department of Banking and Finance

Date Written: December 16, 2021


We study the effect of inconsistent time preferences on actual and planned retirement timing decisions in two independent datasets. Theory predicts that hyperbolic time preferences can lead to dynamically inconsistent retirement timing. In an online experiment with more than 2,000 participants, we find that time-inconsistent participants retire on average 1.75 years earlier than time-consistent participants do. The planned retirement age of non-retired participants decreases with age. This negative age effect is about twice as strong among time-inconsistent participants. The temptation of early retirement seems to rise in the final years of approaching retirement. Consequently, time-inconsistent participants have a higher probability of regretting their retirement decision. We find similar results for a representative household survey (German SAVE panel). Using smoking behavior and overdraft usage as time preference proxies, we confirm that time-inconsistent participants retire earlier and that non-retirees reduce their planned retirement age within the panel.

Keywords: Retirement Timing, Time Preferences, Hyperbolic Discounting, Social Security

JEL Classification: D14, D15, D91, H55, J18, J22, J26.

Suggested Citation

Merkle, Christoph and Schreiber, Philipp and Weber, Martin, Inconsistent Retirement Timing (September 30, 2020). Available at SSRN: or

Christoph Merkle (Contact Author)

Aarhus University ( email )

Nordre Ringgade 1
DK-8000 Aarhus C, 8000


Philipp Schreiber

University of Esslingen ( email )

Kanalstrasse 33
Esslingen, Baden-Wurttemberg 73728
015737860945 (Phone)

HOME PAGE: http://

Martin Weber

University of Mannheim - Department of Banking and Finance ( email )

D-68131 Mannheim
+49 621 181 1532 (Phone)
+49 621 181 1534 (Fax)

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