About this Report:
In this interim report, Minjoon Lee and his coauthors discuss the implications of forced retirement risk on the optimal portfolio choice around retirement. His paper finds that older workers in Canada and the U.S. face a significant risk of being forced to retire before their planned retirement ages. The latest Canadian data also shows the correlation between stock returns and the chance of involuntary job separation is much stronger during the coronavirus crisis. His paper demonstrates that, under forced retirement risk, the optimal portfolio adjustment is to increase the share of risky assets as one gets older and enters retirement, opposite to what is commonly believed.