The new pension system aims to achieve a pension with purchasing power for all participants. A crucial question here is: what is the target level of the pension at retirement and its development in subsequent years?

This pension ambition, absolute but also relative to spending during one’s working life, is an important wheel in several important decisions to be made in the pension sector. Examples include decisions on contribution levels and investment policies, the “fixed decrease” in a flexible pension plan and the projection return in a solidarity-based pension plan. Insights into pension ambition can also be used to inform the design of the choice architecture for participants and to shape products at the intersection of housing and retirement.

In this study, we analyze the desirable retirement ambition using people’s spending. We examine retirees’ spending trends and factors that influence them, such as income level, (changes in) marital status, and changes in health (Finkelstein et al., 2013, Kools and Knoef, 2019). In doing so, we take into account changes prior to and during retirement.