Redeeming university years to increase contributory seniority and pension entitlements is a valuable instrument that enhances workers’ flexibility in shaping retirement decisions. In Italy, this option exists. Graduate workers can redeem university years in order to better control retirement outcomes. Such instrument increases both contributory seniority and the accumulated contributory amount …

When time preferences in an intertemporal optimization problem are represented by non–exponential discounting, a control plan that is optimal today may no longer be optimal from the perspective of a future self. We examine this issue by revisiting four notions…

In the context of stochastic optimal control problems with a general discount function, we introduce the notions of decomposability and of super- and sub-decomposability of the discount function. We clarify that failure to decomposability leads to time inconsistency…

In defined-contribution (DC) pension schemes, members must manage investment risk while ensuring they accumulate sufficient wealth for retirement. At the same time, labor income risk plays a crucial role, as it governs the contribution stream. We study the optimal investment problem of a DC pension fund member in the presence of unhedgeable wage risk driven by idiosyncratic career dynamics. Building on …