Financial planning & optimal retirement timing for physically intensive occupations

Abstract

On average, O.E.C.D. statistics 2 shows that 4 out of 10 workers in developed geographies occupy a "blue-collar" type of position. Since those professions are physically demanding and come with a toll on one's health (which in turns translate into additional healthcare expenses), the length of an individual's active period must be carefully weighted. This paper therefore offers a financial model (and its subsequent program) to help make such decisions. It notably shows that whilst most developed countries require individuals to work for about 40 years, early retirement is a suitable option when healthcare prices are high. This paper also shows that financial literacy has a significant impact on retirements behaviors. For those with a strong predilection for present consumption and little interest in savings and investments, retirement is not an option. In those cases, the financial pressure associated to the healthcare system translates into either an incentive for them to work until the end of their life or not to enter the labor market at all