Parental retirement timing: the role of unanticipated events in the lives of adult children
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Although anecdotal evidence of older parents postponing retirement to financially support their grown children is common, the empirical evidence is scarce. In this paper, we use data from the 1992 to 2010 waves of the Health and Retirement Study to identify a broad set of pivotal events in the lives of adult children. First, we determine whether these events affect subsequent financial transfers from parents to children over multiple years. Next, we determine whether those events that result in subsequent transfers also shift parental retirement expectations. Finally, we quantify the impact of the unexpected children’s events on retirement realizations, moving beyond the correlational analyses in prior literature. Our findings show that a child’s move out of a parental home decreases both expectations and realizations of working after age 65. The magnitude of this effect is similar to that of an own health shock experienced during pre-retirement years.
KeywordsRetirement Retirement expectations Labor force exit Financial support Co-residence
JELJ26 J14 D84 J13
We thank seminar participants at the University of California, San Diego, for their valuable feedback. We especially would like to thank Julie Berry Cullen for many helpful discussions as well as Gordon B. Dahl and Roger Gordon for their thoughtful comments. In addition, we thank three anonymous referees for helpful feedback and suggestions. The views expressed here should not be interpreted as those of the Congressional Budget Office or the Social Security Administration.
Compliance with ethical standards
Conflict of interest
The authors declare that they have no conflict of interest.
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