Retirement patterns in Europe and the U.S.

In this paper various aspects of retirement behavior and how that behavior is influenced by incentives and personal circumstances are discussed. More specifically, the researchers stress the interrelation between retirement, financial incentives, saving, and health. There is great variation in retirement patterns across countries, and the researchers explore the role of health in retirement decisions. In developed countries people tend to live longer than ever, yet retire at increasingly younger ages. On the one hand it can be illustrated why people with more human capital are healthier and retire later. On the other hand the improvements in population health explain a trend towards earlier retirement. Based on an estimated model, some policy changes involving improved health at later ages and changing financial incentives and eligibility ages are simulated. All simulated policy changes have noticeable effects in at least some countries. It turns out that health is an important determinant of retirement.