Considering Part-Time Work after Retirement: Should I Stay or Should I Go?

44 Pages Posted: 13 Jan 2017

See all articles by Hong Mao

Hong Mao

Shanghai Second Polytechnic University

James M. Carson

University of Georgia

Krzysztof Ostaszewski

Illinois State University

Zhongkai Wen

University of Illinois at Chicago

Date Written: July 13, 2016

Abstract

In this article, we use dynamic leisure preference to study the optimal retirement decision with consideration of part-time work after the “official” retirement. We also consider a risky investment besides risk-free investment. and allow investor borrowing money at risk-free interest rate. Our results indicate that the optimal retirement age is very sensitive to the following parameters: coefficient of risk version, the leisure, rate after retirement, coefficient of survival function (describing the individual’s mortality), interest rate and discount rate, and is especially sensitive to the drift of return rate of risky assets invested. Our results also show that mortality improvement greatly affect all other optimal solutions except optimal retirement age, but have small affect on optimal retirement age.

Keywords: Retirement Age; Life Cycle Model; Part-Time Work after Retirement

JEL Classification: E21; I12; J11; J26

Suggested Citation

Mao, Hong and Carson, James M. and Ostaszewski, Krzysztof and Wen, Zhongkai, Considering Part-Time Work after Retirement: Should I Stay or Should I Go? (July 13, 2016). Available at SSRN: https://ssrn.com/abstract=2897978 or http://dx.doi.org/10.2139/ssrn.2897978

Hong Mao (Contact Author)

Shanghai Second Polytechnic University ( email )

No.2360, Jinhai Road
Shanghai, 201209
China

James M. Carson

University of Georgia ( email )

Athens, GA 30602-6254
United States

Krzysztof Ostaszewski

Illinois State University ( email )

Department of Mathematics
Normal, IL 61790-4520
United States
+1-309-438-7226 (Phone)
+1-309-438-5866 (Fax)

HOME PAGE: http://math.illinoisstate.edu/krzysio

Zhongkai Wen

University of Illinois at Chicago ( email )

1200 W Harrison St
Chicago, IL 60607
United States

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