Bequest motive and incentive to retire: Consumption, investment, retirement, and life insurance strategies

We examine how the bequest motive and the incentive affect the consumption, investment, life insurance, and retirement decision of a wage earner with uncertain lifetime. We find, unlike the fixed retirement time model, risky investment prior to retirement decreases as the bequest motive becomes stronger or as the incentive to retire weaker, even though the retirement wealth threshold increases.