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Pension adequacy standards

Due to increasing life expectancy pension benefits and savings need to last longer, which casts doubt on the financial security of retirees. Surprisingly, what pension benefit level can be considered adequate remains unclear. In this paper, we propose an identification strategy for the estimation of pension adequacy standards.

29. mai 2020

Applying a range of econometric techniques to data from the U.S. and Germany, we find that a net pension income of around 100% of the last net working life income, plus or minus 10 percentage points, can be considered adequate.