Income disaster, role of income support, and optimal retirement
Abstract
We investigate individuals’ retirement choices with income disaster. The individuals retire involuntarily when income disaster occurs. We consider government income support for the individuals facing large income gaps and show that retirement timing depends crucially on the support level. We identify a threshold level of support below which delaying retirement is optimal, and above which voluntary retirement occurs once wealth reaches the retirement wealth threshold. We conduct a welfare analysis and provide comparative statics to discuss the role of government income support on retirement.
Fields of Study & Subjects
Financial Literacy
Pension
Retirement Analysis
Agricultural risk and resilience
Economic Policies and Impacts
Publication details
- Journal / source
- Applied Economics Letters
- Publisher
- Informa UK Limited
- Pages
- 1–5
- Publication date
- 26 April 2026
- Language
- EN