Individual decisions on retirement

Chapter 3 of the Americas Social Security Report 2012 analyzes how "social security wealth" or "pension entitlements" are generated, and how retirees spend their money. The realization of a retirement even does not depend only, and often not even mainly, upon the parameters of a retirement scheme. Individuals may decide to withdraw from the labor market before the statutory retirement age or to work several years more for reasons of need, family conditions, health, or personal motivation.

These are some of the results of the chapter:
- Individuals work more when their earnings are high and growing, and when they decline or their growth is sluggish, retirement becomes a more attractive option every year.
- More educated individuals tend to retire later in life because earnings growth is higher for them.
- Often workers move from a salaried job to the informal economy to improve their earnings levels.
- Labor market conditions affect workers' decisions on retirement.
- Consumption and work decisions are closely linked. When retirement can induce an excessive fall in consumption, individuals may decide to put it off for a few years.
- Persons seek to stabilize welfare, avoiding alternate periods of high well-being with others of a poor quality of life