Optimal life-time utility: the effect of retirement age

HIPERFIT Seminar

Talk by Felix Henschel, Institut für Versicherungswissenschaften, Universität Ulm

This paper incorporates retirement decision in an optimal consumption and optimal asset allocation problem. We mainly study the question of whether early retirement brings some added value for individuals and of whether there exists an optimal retirement time.

We identify three key factors which crucially influence the optimal retirement time decision: risk aversion parameter, the leisure gains/losses of choosing a retirement age different from the legally stipulated retirement age, and how the individual weighs the consumption during his working life in his entire utility. Furthermore, we find labor income plays an important role in the retirement decision.

The seminar is held incollaboration with Department of Mathematical Sciences.

Short bio

Felix Hentschel is Scientific assistant at the Institute of Insurance Science, Ulm University.

He recieved his diploma in economic mathematics at Ulm University in 2012.

Moreover he holds a Master of Mathematical Sciences, Binghamton University, NY, USA.