The Timing of Retirement: a Comparison of Expectations and Realizations

39 Pages Posted: 18 Jan 2002

See all articles by B. Douglas Bernheim

B. Douglas Bernheim

Stanford University - Department of Economics; National Bureau of Economic Research (NBER)

Date Written: June 1987

Abstract

In this paper, I employ data drawn from the Social Security Administration's Retirement History Survey (RHS) to study the accuracy of expectations concerning the timing of retirement. The RHS is ideally suited for this purpose, in that it collects information on retirement plans, and follows respondents through time so that one can identify actual dates of retirement. The data are consistent with the view that, when asked to report an expected date of retirement, individuals name the most likely date (i.e. a mode, rather than a mean). Furthermore, these forecasts are highly accurate. There is very little evidence that individuals' expectations were systematically biased during periods in which Congress legislated large real increases in social security benefits. This suggests either that the benefit increaser were anticipated, or that unanticipated changes in benefits have little effect on retirement. The paper also describes differences in the accuracy of expectations by population subgroup.

Suggested Citation

Bernheim, B. Douglas, The Timing of Retirement: a Comparison of Expectations and Realizations (June 1987). NBER Working Paper No. w2291. Available at SSRN: https://ssrn.com/abstract=286184

B. Douglas Bernheim (Contact Author)

Stanford University - Department of Economics ( email )

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National Bureau of Economic Research (NBER)

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