Social Interactions and the Retirement Age

In this study we gauge the impact of social interactions on individual retirement preferences. A survey including self-assessments and vignette questions shows that individual preferences are affected by preferences and actual retirement behavior of the social environment. Retirement from paid work depends on the retirement age of relatives, friends, colleagues and acquaintances. Information and advice provided by the social environment play a role in the retirement decision. A majority of respondents would postpone retirement when their social environment retires later. Our results indicate that a one year increase in the retirement age in an individual's social environment is followed by an average increase of three months in the individual's own retirement age. In addition, people show the tendency to stick more to the state pension age than to other retirement ages, which may suggest that the state pension age functions as a social norm