Retirement Saving

This research examined the influence of delay and anticipated health and enjoyment on the amount of retirement savings sacrificed for early retirement. In addition to testing and supporting predictions that willingness to sacrifice retirement savings would be less with shorter ...

The purpose of this study is to explore the extent to which individuals' knowledge of retirement planning, future time perspective, and financial risk tolerance influence retirement saving practices. A total of 270 young working adults participated in the study. Regression analyses reveal that each of the three variables is predictive of saving practices, and they interact with one another as well. From an applied perspective, the findings suggest that counseling and intervention efforts aimed at pro-moting retirement saving should differentially target individuals on the basis of these three psycho-logical dimensions.

This thesis provides empirical evidence on financial skills and the relation with household financial decision-making based upon specially designed questions for the DNB Household Survey (DHS). The majority of the respondents has some grasp of concepts such as interest compounding, inflation, and the time value of money. However, very few go beyond these basic concepts; many households do not know

The call for enhanced financial literacy amongst consumers is a global phenomenon, driven by the growing complexity of financial markets and products, and government concerns about the affordability of supporting an ageing population. Worldwide, defined benefit pensions are giving way to the risk and uncertainty of defined contribution superannuation/pension funds where fund members now make choices and decisions that were once made on their behalf. An important prerequisite for informed financial decision-making is adequate financial knowledge and skills to make competent investment decisions. This paper reports the findings of an online survey of the members of a large Australian public sector-based superannuation fund and shows that although respondents generally understand basic financial matters, on average, their understanding of investments concepts, such as the relationship between risk and returns, is inadequate. These results highlight the need for education programs focusing specifically on developing fund members’ investment knowledge and skills to facilitate informed retirement savings decisions.

The need for Australians to increase retirement savings has been widely promoted. Yet, our understanding of the motivations of individuals to save at a higher rate remains sparse. This paper reports the findings of a survey of superannuation fund members and their motivations to contribute more to superannuation and to investment strategy. The paper uses the theory of planned behaviour to focus on the important motivational influence of social norms. The study finds that spouses appear to be the primary source of social influence for retirement savings decisions. The government and employers appear to exert little influence, and financial advisors and superannuation funds take up the middle ground of social influence. Possibilities for interventions designed to influence behaviour are discussed and opportunities for further study are proposed.

Practitioners identify an average capital charge of 2.7% in pension buyouts as the cost of bearing uncertainty over future rates of mortality. This charge implies that it would cost around £60bn, or 4% of GDP, to insure the existing system of private retirement savings in the UK against the risks posed by mortality rate uncertainty. Using a plausible specification of mortality uncertainty, it is shown that only annuitants with relative risk aversion clearly higher than 20 would be prepared to pay this. Our results consequently provide an explanation for the thinness of the pensions buyout market. The pensions buy-out market in the United Kingdom (Lane, Clark and Peacock 2008) levies an average capital charge of 2.7% due to the uncertainty over mortality rate projections. The total value of life assurance and pension funds in the UK at the end of 2007 was £2,186bn, most of which represents savings for retirement. These figures suggest that — at current market prices — it would cost a...

Doubts about the positive effect of capital market development on private saving extend beyond the ambiguous theoretical link between interest rates and savings, to include demonstrable reduction of private savings as a result of financial developments such as pension reforms and increased household access to credit markets. The empirical validity of the effect of pension reforms on domestic savings in

The research reported herein was pursuant to a grant from the US Social Security Administration (SSA) funded as part of the Retirement Research Consortium (RRC) and the Pension Research Council at the Wharton School. Without implicating them, we are grateful for comments ...

Paul Gerrans School of Accounting, Finance and Economics Faculty of Business and Law Edith Cowan University Joondalup, WA 6027 Australia Phone: +618 6304 5605 Fax: +618 6304 5271 Email: p.gerrans@ecu.edu.au ... Three crucial ingredients influence how much ...