Optimal Retirment Age

Professors Jon Barry Foreman and Bing Yung-Ping Chen just posted on SSRN an article entitled Optimal Retirement Age that will be published in NYU review of Employee Benefits and Executive Compensation.  Their abstract describes their article as follows:

What is the optimal retirement age? This paper looks at the optimal retirement age from various perspectives. Most of the current pension laws relating to retirement age were codified decades ago, and they have become badly out of date given what we now know about longevity, about health and work in old age, and about how pension policies influence retirement decisions. This paper provides some background about demography, health, and retirement; summarizes how current pension laws influence the design of pension plans and the timing of retirement; and looks at the optimal retirement age from the perspective of employers, government, and workers. This paper then offers some new perspectives on the relationship between demography and retirement age; discusses the implications for public policy; and offers recommendations about how to reform our pension laws so that pension plans comport with our ideas about optimal retirement age.

This paper is more like an economic theory paper than a legal paper. It is full of statistics and empirical information about the fact that Americans and living longer and not saving enough for retirement. This article calls for increasing the normal retirement age to account for this and to account for the fact that many Americans do not save enough for retirement.

Mitchell H. Rubinstein

Hat Tip: Workplace Prof Blog