Review of Finance 2026

Trading in your Golden Years: The Effects of Early Pension Withdrawal on Individual Investments

Sumit Agarwal¹; Allaudeen Hameed²; Yuanyuan Pan²; Chek Ann Tan²

¹ National University of Singapore , Department of Economics, Finance and Real Estate · ² National University of Singapore , Department of Finance

Abstract

We examine the causal effects of a policy allowing early withdrawal of pension funds on individuals’ investment behavior. Upon turning 55, eligible individuals may withdraw a portion of their pension savings. Using detailed brokerage data, we find that this liquidity access triggers increased trading of 9% to 33%, especially in riskier, leveraged assets, without improving investment performance. The resulting increase in trading costs and portfolio volatility, particularly among males and lower-income investors, ultimately diminishes retirement wealth.

DOI

10.1093/rof/rfag026

Language

en

Sources

crossref openalex

Cite

APA 7 MLA 9 Chicago (author–date) Harvard Elsevier Harvard (JFE, JBF…) The Accounting Review Academy of Management American Marketing Association INFORMS (Management Science) Copy citation Copied ✓