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Question: As individuals approach retirement, a number of forces push them out of the labor force. First, elderly individuals often find work more taxing than younger individuals and as one ages, it becomes more and more difficult to work. Second, because of the nature of pension systems and social security, as you age, the benefits you receive once retired increase. In other words, someone who retires at 70 will receive higher pension benefits than someone who retires at 60.
Show the dynamics of the retirement decision graphically by showing how incentives change as one ages. Your graphs should demonstrate both how work becomes more difficult as you age as well as the increasing potential pension benefits as you age. The axes of your graphs should be leisure and income, NOT age and income. Provide a brief discussion.
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