Bifurcation in optimal retirement
Portfolio Management
2025-06-04 v1
Abstract
We study optimal consumption and retirement using a Cobb-Douglas utility and a simple model in which an interesting bifurcation arises. With high wealth, individuals plan to retire. With low wealth they plan to never retire. At a critical level of initial wealth they may choose to defer this decision, leading to a continuum of wealth trajectories with identical utilities.
Cite
@article{arxiv.2506.02155,
title = {Bifurcation in optimal retirement},
author = {Bushra Shehnam Ashraf and Thomas S. Salisbury},
journal= {arXiv preprint arXiv:2506.02155},
year = {2025}
}