Incentives and limitations of employment policies on retirement transitions

Abstract

JEL Codes: J23; J26; J32As the population ages and life expectancy at older ages increase, it becomes more challenging for individuals, firms, and governments to finance adequate living standards in retirement. Working longer is an important option that must be considered if well-being in retirement is to be sustained. The papers in this Special Issue of the Journal of Pension Economics and Finance explore various aspects of the transition from career employment to complete retirement. The research covers a broad range of topics including comparing retirement transitions in the public and private sectors, individual incentives that influence retirement timing, return-to-work policies adopted by many public employers, and the management of wealth before and during retirement. The articles also consider how many individuals move from career jobs to new employment and then to complete retirement. In addition, the research focuses on work incentives of employer-provided pensions and health plans, Social Security, and government sponsored health plans, and also how provisions of these plans alter the transition to retirement.The articles are grouped into three areas. The first set of four articles examines the retirement transition and the importance of return-to-work policies, pension characteristics, and Social Security provisions influencing labor market behavior. Three of the studies focus on public school teachers and other public sector employees, while the fourth compares retirement transitions of private and public sector workers. The second set comprises two papers exploring changes in health insurance plans, how these plans are financed, and the impact of plan provisions on work and retirement decisions. The third set considers how financial market conditions influence economic well-being in retirement and contains three articles exploring how interest rates shape the choice of annuity options, saving decisions, and workers' ability to achieve their desired standard of living in retirement. These papers highlight the variety of paths that workers follow in transitioning from their full time career jobs to complete retirement, and they also show how these paths are influenced by employer retirement policies, Social Security, and financial market conditions.