The decision of when to claim Social Security benefits is among the most consequential and irreversible financial choices older Americans face, yet interventions to help guide it have had limited effectiveness. Building upon past research demonstrating that people choose differently and make different predictions for others than they do for themselves, we ask whether making recommendations for another can shift one’s own claiming decision. In two high-powered experiments using national survey panels, we show that older American adults intend to claim retirement income benefits earlier (vs. later) after making guided recommendations for a person who died relatively young (vs. lived to an old age) after retiring. This effect persists when the effect of recalling such a person is disentangled from that of recommending. This research suggests that making guided recommendations for others can be a powerful intervention for one’s own choices in highly consequential domains where trade-offs are difficult to make.

Deciding whether to use an annuity to draw down accumulated retirement wealth is among the most complex financial decisions individuals face. It requires reasoning about longevity risk, stochastic income streams, and largely irreversible trade-offs, often at older ages and with limited opportunities to learn from experience. This paper reviews theoretical, empirical, and experimental research to examine how financial literacy and longevity literacy shape annuitization decisions. While some extensions of the standard lifecycle model can rationalize low annuity demand, their explanatory power depends on individuals’ ability to optimize over a set of complex risks and trade-offs. Evidence shows that, although financial and longevity literacy are only weakly and inconsistently related to annuity take-up, they are strongly associated with retirement planning, the coherence of annuity valuations, and sensitivity to framing and choice architecture. These patterns suggest that literacy should be understood not as a direct determinant of annuity demand, but as a constraint on the extent to which observed annuitization behavior can be interpreted as revealing true preferences.

The welfare impact of allowing flexible payouts in a tontine is investigated. This is achieved by simulating an open tontine with consistent membership numbers. Certainty equivalent payouts are used to measure welfare loss compared to an equivalent actuarially fair annuity. In the base scenario with no flexible payouts or adverse selection, welfare loss is 0.56 per cent compared to the equivalent annuity, of which more than 80 per cent is due to systematic mortality uncertainty and less than 20 per cent is due to idiosyncratic mortality uncertainty. Where biased (adverse selection) flexible payments are present, additional welfare loss is also present. However, with appropriate constraints on flexible payout structures, the average welfare loss is smaller than the loading applied to an equivalent annuity. This investigation is presented in an administratively feasible structure, and hence the key findings of this paper can be broadly applied by product providers keen to innovate.

It is often thought that compulsory retirement funding gains support from paternalistic considerations. This paper examines this claim. I argue that compulsory retirement funding is more coherent when understood as an attempt at temporal smoothing than counterfactual insurance. An implication is that any paternalistic case for retirement funding faces problems that are more severe than they would be if compulsory retirement funding were insurance. I label these the problems of ‘inverted bias’ and of the ‘arbitrariness of income from labour’. The paper then makes some suggestions about how these points about paternalism bear on the problem of justice in retirement funding.

Around the start of the 21st century, countries began to experience a unique demographic transition. After generations of declining dependency and expanding labor forces, increasing longevity and persistently low fertility have reversed dependency trajectories. This paper examines the political consequences of rapid demographic aging and retirement reforms. An empirical assessment of 41 countries from 1980 to 2020 suggests that efforts to postpone retirement are politically destabilizing. In particular, increases in average retirement age and labor force participation among older cohorts may increase political instability. Demographic forecasts for rich and middle-income countries indicate a massive growing demand for age-related public services, alongside a rapid decline in the relative size of economically active populations. Policy reform is therefore urgently needed to sustain pension systems, maintain economic growth, and mitigate political instability. The paper concludes that governments must consider country-specific demographic, political, and economic conditions when designing alternatives to potentially destabilizing retirement reforms.

This study examines the subjective quality of life of globally expanding senior citizens post-retirement, from a volunteering perspective. Formal volunteering is one way to engage retired seniors, providing social connectedness and enhanced well-being while potentially reducing their support service needs. It also provides a valuable resource to nonprofits. Thus, it is a win–win for both these individuals and their societies. This study has empirically examined associations between regular formal volunteering and seniors’ personal outlook, in the context of enhanced subjective quality of life. Past research has overlooked this important perspective, which often influences relationships between volunteering and subjective quality of life. Surveying 207 seniors, this study found that voluntary work perceptions are often associated with regular formal volunteering, which in turn is associated with the individual’s personal outlook, which in turn is positively associated with the aspects of subjective quality of life, particularly mental and emotional well-being. These results will guide policymakers on improving the quality of life of seniors through their extended involvement as volunteers, including for nonprofits, ways to recruit, train and manage their volunteer workforce and take action in further increasing the profile and the availability of formal volunteering.

Divorce is increasingly common and can have a significant impact on later-life work and retirement. However, the lived experience of choice and control around divorce and its financial ramifications is not adequately understood. This article demonstrates how women and men differentially experience divorce as a long-run lifecourse factor, which can impact an individual’s scope for choice and control about working in later life, and how and when to retire. From a dataset of 47 in-depth interviews of workers aged over 50 in the United Kingdom from the international Dynamics of Accumulated Inequalities for Seniors in Employment project, findings show that the extent of choice and control at the time of divorce was constrained by individual and gendered lifecourse factors, by gendered, asymmetrical access to salient financial information and by emotional responses to relationship breakdown. Drawing on cumulative (dis)advantage over the lifecourse as a theoretical lens, this article demonstrates the ways in which short-term choices reinforce existing gendered and socio-economic (dis)advantage while instigating new pathways for (dis)advantage that have long-term implications for work and retirement.

Using Danish register data, we study whether individuals save enough to maintain almost all (90%) of their pre-retirement consumption. We find that 85 percent do, largely due to mandatory labour market pension contributions. The remaining 15 percent are less likely to have mandatory pension schemes and do not compensate for the lack thereof via voluntary private savings. However, mandatory contributions come at the cost of lower consumption and non-retirement savings during working years. Individuals experiencing the largest increases in mandatory pension contributions accumulate less non-retirement wealth and consume less before retirement compared to those with small increases.

The present paper studies how to encourage longer careers by reducing labor income taxes for older workers. The analysis relies on numerical experiments within a general equilibrium overlapping generations (OLG) model that is calibrated to an average economy of the organisation for economic co-operation and development (OECD). I find that the policy can delay retirement and increase tax revenue and the capital stock if treatment occurs close to, and before, the preferred retirement age. A non-trivial share of the increased post-treatment labor supply can be explained by the substitution of hours worked from the pre-treatment career to the post-treatment career. Lowering the treatment age only leads to small changes in the aggregate labor supply, but is increasingly costly for the government in terms of forgone revenue. Tax shifting toward higher consumption taxes always increases welfare, while tax shifting toward higher capital or labor income taxes paid by younger workers only increases welfare if treatment occurs sufficiently late in the career.

We explore debt and debt management among older Americans (ages 51–61 years) using the 2018 National Financial Capability Study. Though these individuals should have been at the peak of their retirement savings, we show that many were heavily indebted, often due to unpaid medical bills and student loans. Additionally, fewer than half (43%) could correctly answer three basic financial literacy questions; importantly, less financially literate people were more likely to hold excessive debt, be contacted by debt collectors, and carry medical debt or student loans. Our findings show that, even before the pandemic, a sizable proportion of older Americans was financially distressed, underscoring the need for researchers and policymakers to devote attention to specific types of debt that burden the older population. Particularly vulnerable groups include African-Americans, women, and the least-educated.

We examine individuals’ retirement behaviour in response to changes in the State Pension eligibility age (SPe-age) introduced in UK Pension Acts. Our findings show that the annual probability of retirement reduced significantly in response to a one-year increase in SPe-age, by 8.2pp and 6.4pp for men and women, respectively. They also show that younger individuals can adjust their Expected Age of Retirement (EAR) downwards in response to an increase in their SPe-age. Thus, while an increase in the SPe-age induces individuals to postpone actual retirement, it does not necessarily lead to certain groups of individuals to revise their EAR upwards, which could result in suboptimal retirement planning. The latter can be problematic for those with low occupational pension wealth and/or individuals who rely disproportionately on State Pension. Our findings suggest the need for targeted communication campaigns aimed at specific groups of prime aged workers to improve their retirement planning.