Pension Wealth and the Timing of Retirement

Torben M Andersen, Anne Katrine Borgbjerg and Jonas Maibom

No 21013, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We analyze how pension wealth influences retirement timing using 25 years of Danish administrative panel data on wealth and labor market status. Exploiting early-career variation in firm-specific mandatory pension contribution rates, we study labor supply decisions from age 55 onward. Greater pension wealth accelerates labor market exit: at age 63, the elasticity is about 0.3—an additional 100,000 DKK (15,000 USD) at age 55 reduces earnings by 1% at age 63. Effects intensify near statutory retirement age, driven by self-support and early occupational pension withdrawals. Mandatory savings raise retirement wealth but induce earlier exit, underscoring key behavioral responses for pension policy design.

Keywords: Pension; wealth (search for similar items in EconPapers)
JEL-codes: D14 J22 J26 J32 (search for similar items in EconPapers)
Date: 2026-01
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