Optimal Retirement Age and Lower Bound on Interest Rate

Nalinaksha Bhattacharyya


For a long time now, the monetary policies in the US and other industrialized countries have been a regime of cheap money with the interest rate often being negative. A low interest rate in the framework of the Keynesian monetary policy stimulates demand but is hard on the retirees who are mostly on a fixed income. This paper generates a simple model to understand the interaction between current wealth, savings rate, interest rate and retirement age. The model also suggests a lower bound on the interest rate. The minimum interest rate at which Americans of median age with median wealth and median income, and retiring at the age of 67, turns out to be 10%.

Full Text:


DOI: https://doi.org/10.5430/afr.v13n1p1


  • There are currently no refbacks.

Copyright (c) 2023 Nalinaksha Bhattacharyya

Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License.

Accounting and Finance Research
ISSN 1927-5986 (Print)   ISSN 1927-5994 (Online) Email: afr@sciedupress.com

Copyright © Sciedu Press

To make sure that you can receive messages from us, please add the 'Sciedupress.com' domain to your e-mail 'safe list'. If you do not receive e-mail in your 'inbox', check your 'bulk mail' or 'junk mail' folders.