Time Inconsistency and Retirement Choice

12 Pages Posted: 5 Mar 2015

See all articles by T. Scott Findley

T. Scott Findley

Utah State University

Frank Caliendo

Utah State University

Multiple version iconThere are 3 versions of this paper

Date Written: February 26, 2015

Abstract

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 different set of conclusions. We show that if financial planning is enriched to include the choice of when to retire, then naïve hyperbolic discounters may borrow far less and start saving for retirement significantly earlier than exponential discounters.

Keywords: hyperbolic discounting, naiveté, retirement choice, time inconsistency, life-cycle consumption and saving

JEL Classification: C610, D030, D910

Suggested Citation

Findley, T. Scott and Caliendo, Frank, Time Inconsistency and Retirement Choice (February 26, 2015). CESifo Working Paper Series No. 5208, Available at SSRN: https://ssrn.com/abstract=2573636 or http://dx.doi.org/10.2139/ssrn.2573636

T. Scott Findley (Contact Author)

Utah State University ( email )

Department of Economics and Finance
3565 Old Main Hill
Logan, UT 84322-3565
United States
+001-435-797-2371 (Phone)

HOME PAGE: http://tscottfindley.com

Frank Caliendo

Utah State University ( email )

Logan, UT 84322
United States

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
57
Abstract Views
599
Rank
239,285
PlumX Metrics