Teachers’ Knowledge and Preparedness for Retirement: Results from a Nationally Representative Teacher Survey

Fuchsman, Dillon; McGee, Josh B.; Zamarro, Gema

doi:10.2139/ssrn.4011391

Cited by 1 publication

(1 citation statement)

References 17 publications

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“…Our results also provide evidence that employees may be anchoring to the 30 YOS retirement rule independent of the financial implications of that threshold. Such behavior is consistent with prior literature that has found workers are not particularly knowledgeable about their retirement plans (Chan and Stevens 2008; DeArmond and Goldhaber 2010; Fuchsman, McGee, and Zamarro 2021; Fuchsman et al 2023), and that social norms, statutory retirement ages, and co-worker peer effects can influence retirement timing independent of any financial incentives (Lumsdaine, Stock, and Wise 1996; Behaghel and Blau 2012; Brown and Laschever 2012; Vermeer, van Rooij, and van Vuuren 2019; Seibold 2021).…”

Section: Discussionsupporting

confidence: 89%

Evidence on the Relationship between Pension-Driven Financial Incentives and Late-Career Attrition: Implications for Pension Reform

Goldhaber,

Grout,

Holden

et al. 2024

ILR Review

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Retirement plans can create strong financial incentives that have important labor market implications, and many states have adopted alternative plan designs that significantly change these incentives. The authors use longitudinal data to investigate the impact of Washington State’s 1996 introduction of a hybrid retirement plan on late-career attrition. The unique setup of Washington’s plans allows them to provide empirical evidence on the influence of financial incentives created by statutory retirement eligibility thresholds. Findings show that despite facing very different financial incentives, teachers enrolled in the hybrid and traditional plans respond similarly to reaching a key retirement eligibility threshold. The authors hypothesize that teachers are anchoring to the eligibility thresholds, muting the influence of the financial incentives. They also provide evidence that, in the presence of bright-line eligibility thresholds that can anchor workers’ separation behavior, commonly used structural models may overpredict workers’ responsiveness to the financial incentives embedded in retirement plans.

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