Retirement puzzles: New evidence from personal finances

Using comprehensive transaction-level panel data, we document that individuals repay their consumer debt and save more after they retire. These findings are puzzling because, in principle, people should save more before, rather than after, the expected decrease in income upon retirement. We discuss several potential explanations for our findings, including reductions in work-related expenses and increases in medical health risks around retirement, which are the leading explanations of the so-called retirement-consumption and retirement-savings puzzles. We thereby inform the larger question of whether individuals save enough for retirement. •Use transaction-level bank data to study financial behavior around retirement.•Document that individuals repay their consumer debt and save more after they retire.•Puzzling as people should rather save more before the expected income decrease.•Work-related expenses and medical health risks cannot fully explain findings.•Conclude that individuals, on average, appear not have saved enough for retirement.