Retirement expectations and satisfaction with retirement provisions

This paper investigates the relationship between subjective expectations regarding the replacement rate of income at retirement and several measures of pension satisfaction. We use panel data on Dutch employees, analyzed with fixed effects models, allowing for correlation between unobserved heterogeneity in satisfaction and optimism or pessimism in expectations. The level of the expected replacement rate is found to be positively related to satisfaction: respondents who revise their expectations of the level of their replacement rate upwards tend to become more satisfied with their pension provisions, in particular with the level of the expected benefits. We do not find robust evidence for a relationship between uncertainty and pension satisfaction.

Netspar, Network for Studies on Pensions, Aging and Retirement, is a thinktank and knowledge network. Netspar is dedicated to promoting a wider understanding of the economic and social implications of pensions, aging and retirement in the Netherlands and Europe.

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