Time inconsistency and retirement choice

Hyperbolic discounting with naiveté is widely believed to provide a better explanation than exponential discounting of why people borrow so much and why they wait so long to save for retirement. We reach a di¤erent set of conclusions. We show that if fi?nancial planning is enriched to include the choice of when to retire, then naivehyperbolic discounters may borrow far less and start saving for retirement signi?cantly earlier than exponential discounters.