Saving for retirement

In this research, Marlene Koch studies how to optimize the retirement savings settings of households over their life cycle. Her results show that requiring individuals to contribute a constant share of their labor income to a retirement account increases loan-to-value ratios and typically defers homeownership. 

Together with her co-authors she investigates three alternative pension systems: (1) early withdrawals to acquire homeownership, (2) age-dependent contributions, and (3) a flexible scheme, which builds on the intuition, that it is not important how individuals build up savings as long as they build up sufficient savings, and only forces individuals to save when they miss the age-dependent savings target. All three systems lead to a similar accumulation of wealth, but lower loan-to-value ratios, usually earlier homeownership, and higher welfare.

<- Watch the short video in which she explains her analysis

Do you want to know more about the results of this project?

Please download and read the full paper below