There’s No Time Like the Present: The Cost of Delaying Retirement Saving
نویسندگان
چکیده
Many people delay joining a pension plan until well into their working lives. We use a stochastic simulation model to show the cost of this delay in terms of the higher pension contributions that must eventually be paid to ensure an adequate retirement income. We find the levels of contributions required for individuals who start saving late are so high it is questionable whether they are affordable for anyone not on a high income. We also analyze the cost in terms of reduced pension of an interrupted labor market history, such as that experienced by someone who leaves work for a period to bring up a family. © 2006 Academy of Financial Services. All rights reserved. JEL classification: D14; G11; G23
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