When is the Optimal Time to Retire?
Authors: Dr. Chandrasekhar Putcha, Dr. Yue Liu, Dr. Yi Jiang, Dr. Weili Lu
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This paper investigates the optimal age of retirement by considering many factors. The main factor is the system in which the employee is working. We use the CALPERS (California Public Employees Retirement System) data in our study. The method and mathematical tools we use, however, is not restricted to CALPERS system and can be generalized to any other systems. In addition, we also examine the longevity risk factor that affects the optimal retirement age. Overall, we find the optimal age of retirement is determined by the benefit an employee receives after retirement and the longevity of the employee.