How Does Income and Financial Satisfaction Change with Retirement? Insights from Swiss Panel Data
31 Pages Posted: 18 Feb 2021
Date Written: January 6, 2021
We analyze the change in income on retirement on a person-by-person basis using Swiss household panel data, and the financial satisfaction associated with that change. Our results indicate that self-employed individuals exhibit a statistically significant higher income-ratio and improvement in financial satisfaction than employees. Moreover, persons with a higher absolute income during their active years exhibit a significantly lower income-ratio. Additionally, persons in the supra-mandatory tier of the system are less satisfied with their financial situation after retirement. Overall, the current system benefits persons in the middle-income range with a working income within the highly regulated part of the system.
Keywords: Retirement income, pension system, financial satisfaction, pension regulation
JEL Classification: G23, I31, J14, J26, J32
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