Retirement Plans Research Articles

Implikasi Kontrol Diri, Kecerdasan Spiritual dan Literasi Keuangan dalam Pengelolaan Keuangan

Financial management is the process of planning, organising, supervising, and controlling the money or financial assets of a person or organisation. The goal is to manage finances wisely by maximising the use of financial resources to meet daily needs, achieve short-term and long-term financial goals, and manage financial risks. This includes budgeting, saving, investing, debt management, retirement planning, and other financial decisions. Good financial management is the key to achieving financial stability and achieving financial goals. Students carrying out financial management are influenced by several factors including internal factors such as self-control, and spiritual intelligence. Then external factors, namely knowledge or the level of financial literacy possessed by students. This study aims to analyse the effect of self-control, spiritual intelligence, and financial literacy on individual financial management. Good financial management is the key to success in achieving personal financial stability and long-term financial goals. The research population was Pelita Bangsa University students with a sample of Faculty of Economics and Business students. The results showed that self-control has no effect on one's financial management. Meanwhile, financial literacy and spiritual intelligence have a significant positive effect on financial management. The results prove that when someone has high financial literacy coupled with spiritual intelligence, the ability to manage finances will be better. However, self-control is not indicated to influence a person to carry out financial management. Simultaneously, it shows that self-control, spiritual intelligence and financial literacy together affect financial management. The results of the study have a strong relationship of 76

Systemic risk assessment of Lithuanian second-pillar pension funds through connectedness and spillover

Pension funds are an essential part of retirement planning, and their performance and risks play a significant role in ensuring financial stability for retirees. This study aims to analyse the connectedness and spillover effects in the Lithuanian second-pillar pension fund market. The findings of this study provide insight on the interdependence within the second-pillar pension funds market and with other financial markets, and contribute to a better understanding of the risk-return trade-off of pension funds, especially during high-volatility periods. Differently from other studies in this paper market regimes are identified using Hidden Markov Models (HMM). Interdependence (including multivariate and non-linear) and causality between pension funds are analysed in different market regimes. Finally, returns spillover in different regimes is estimated using VAR and VECM models. The results of this paper are expected to be useful for pension fund managers, participants, and pension system supervisors in making decisions about investment strategies and in practices of systemic risk management regulation.

Is rising student debt affecting retirement savings? Evidence from the survey of consumer finances

AbstractUsing exogenous changes in the personal bankruptcy treatment of student loans as well as the level of student debt, we find that student debt has a negative effect on household retirement savings. This negative relation is present for younger and older individuals, and is larger for the latter group, indicating lower levels of retirement savings for precisely those who can least afford it. We also find that student debt is related to greater borrowing on retirement plans. Households with more student debt expect to have insufficient retirement income and are less able to plan financially for the long term.

The proposed mandatory swing pricing regime and the hard close requirement : Practical considerations

In November 2022, the U.S. Securities and Exchange Commission (the ‘Commission’) proposed rule amendments that would require, among other things, open-end mutual funds to implement a mandatory swing pricing regime under certain circumstances (the ‘Proposals’). To ensure that funds receive order information with sufficient time to make a swing pricing determination, the Proposals would require funds to set a hard cut-off time for the receipt of purchase and redemption orders. Currently, the vast majority of investments in open-end mutual funds are made through intermediaries and retirement plans, such that investors who submit orders to intermediaries and retirement plans before the time the fund has established for calculating its net asset value (NAV) generally receive the same day’s NAV, even if the fund receives the order information from the intermediary or retirement plan after NAV is calculated. This is how mutual fund pricing has operated in the US for over 50 years. The Proposals would upend current operations. Under the Proposals, an investor’s order would have to be received by the fund — not a financial intermediary or a retirement plan — before the cut-off time set by the fund for calculating NAV in order to be eligible for the same day’s NAV. If adopted as proposed, the Proposals would require extensive changes to mutual fund pricing systems and infrastructure in the US. In this paper, we acknowledge the arguments against the Proposals by an overwhelming majority of industry commenters and, without undercutting those arguments, we explore practical, regulatory and compliance considerations for funds seeking to better understand how the Proposals might affect their day-to-day operations.

‘Safe as Houses’: Recalibrating Homeownership in Australian Retirement Planning

AbstractAustralia's longstanding culture of homeownership, symbolising stability and achievement, also impacts positive ageing outcomes across multiple domains. Recently, demographic and economic factors, such as housing affordability issues, insufficient income and barriers to the housing market, pose challenges to homeownership, with implications for retirement planning as the use of home equity to support ageing evolves. Secure housing and financial security are critical for successful ageing, necessitating flexible solutions and innovative financing models like fractional ownership. We raise awareness of the changing dynamics of retirement planning and accentuate the increasing significance of innovative housing solutions in supporting health during retirement.

How Does Tax Timing Affect Spending in Retirement?

ABSTRACT This study investigates how the timing of taxes on retirement savings affects spending. Our findings are based on an experiment where participants spend funds from either a deferred-tax account, where taxes are paid upon withdrawal, or a currently taxed account, which represents after-tax savings withdrawn tax-free. We find that deferred-tax account holders consume savings faster than currently taxed account holders with equal after-tax spending power. Further, given equivalent nominal balances, deferred-tax and currently taxed account holders spend nominally equivalent amounts on goods, despite deferred-tax account holders needing to pay taxes on withdrawals. This finding suggests deferred-tax account holders under-adjust for taxes and, therefore, consume their wealth faster. These findings have important implications for financial advisors and tax policy makers. They also add to a growing body of research showing that tax timing affects individual decision making and that currently taxed accounts often encourage individuals to make better retirement planning decisions. Data Availability: Data are available from the third author, upon request. JEL Classifications: H24; K34.

A Systematic Literature Review on Retirement Planning Behaviour of Employees

This paper presents an overview of research on retirement planning behaviour, identifies the significant gap and recommends future research scope. This study finds out the factors influencing retirement planning behaviour of employees such as demographic factors and financial literacy. The review is based on 28 articles appearing in various journals published during the year 1st January 2005 to 31 December 2022 using the PRISMA framework. This paper attempts to provide a systematic and inclusive assembling of the knowledge on this subject. Further, it synthesizes the findings of various studies on retirement planning behaviour.

Financial Literacy, Pension Awareness and Retirement Planning in Nigeria

The study examined the effect of financial literacy and pension scheme awareness on retirement planning. We adopted survey research using where questionnaire was administered to 1350 respondents and employed multinomial logit model. Our findings revealed the significant positive effects of financial literacy and financial consultation on retirement planning decision. In contrast, family size decreases the probability of retirement planning respondents who mostly plan relative to those who rarely or never plan. Nevertheless, pension awareness did not have significant relationship with retirement. In conclusion, people who are financially literate are more likely to invest and are more inclined to plan for their retirement. Therefore, policies that can increase financial education and pension scheme literacy are worth implementing in the tertiary institutions.

Retirement Planning: The Volatility-Adjusted Coverage Ratio

Retirement Planning: The Volatility-Adjusted Coverage Ratio

Leveraging FinTech Compliance to Mitigate Cryptocurrency Volatility for Secure US Employee Retirement Benefits: Bitcoin ETF Case Study

The integration of cryptocurrencies, particularly Bitcoin, into retirement savings plans has recently garnered significant attention. This interest has been amplified by the U.S. Securities and Exchange Commission's approval of Bitcoin Exchange-Traded Funds (ETFs) in January 2024 and Fidelity Investments' decision to include Bitcoin in their 401(k) plans. These landmark developments represent a paradigm shift in retirement investment strategies, merging traditional financial planning with the dynamic and volatile world of cryptocurrencies. The entry of Bitcoin introduces novel challenges, including increased volatility and regulatory uncertainty, necessitating a comprehensive examination of its impacts on retirement savings. The study sought to explore the role of Financial Technology (FinTech) in managing these risks and assess the adequacy of current regulatory frameworks. Employing a quantitative research approach, the study collected data from 386 participants, including FinTech practitioners and investment portfolio managers through a survey that combining closed-ended and open-ended questions. Multiple regression was used to analyze the relationships between variables such as FinTech integration, regulatory compliance, and the risk associated with cryptocurrency-inclusive retirement portfolios. The study revealed that the inclusion of Bitcoin significantly increases portfolio volatility. It also found that advanced FinTech data management techniques significantly enhance risk mitigation, while current regulatory frameworks are inadequate for governing the inclusion of cryptocurrencies in retirement plans. A comprehensive framework combining FinTech and regulatory compliance was shown to effectively reduce investment risks. The study recommends cautious consideration of cryptocurrencies in retirement portfolios, with an emphasis on assessing the risk appetite of participants. It advocates for dynamic regulatory frameworks and enhanced use of FinTech for real-time risk management. The study suggests that retirement plan providers should adopt an integrated approach, combining technological innovations with regulatory oversight, to navigate the complexities of cryptocurrency investments effectively.

Planning for retirement during active service in Ghana: Insights from pensioners in the Greater Accra Region

ABSTRACT Workers often participate in pre-retirement planning activities to gain awareness of the likely changes they may experience when they retire to enable them to prepare accordingly. Although pre-retirement planning is essential for successful retirement and healthy aging, studies on pre-retirement planning activities among older adults in Ghana are limited. This study explored pre-retirement planning actions that were taken by Social Security and National Insurance Trust (SSNIT) pensioners in the Greater Accra Region of Ghana. A sequential explanatory mixed-methods approach was adopted to gather data from 437 pensioners aged 60 years and above through surveys, interviews, and focus group discussions. The results indicate that while in active service, many (309) pensioners were not motivated to plan for retirement due to issues, such as low income, and distrust of financial institutions. When planning did take place, the pensioners favored financial planning over social, mental, and physical planning. The respondents also revealed that they did not prepare adequately for retirement due to low salaries, as well as low knowledge on pre-retirement planning. Policies are needed to encourage pre-retirement planning among workers in Ghana to enable them to have an appreciable quality of life in old age.

Effects of Family Characteristics and Work Relationship on Retirement among Teachers in Agona West Municipality, Ghana

Family characteristics and work relationships have effects on teachers’ retirement decision-making in the country. This has led to much frustrations of life for some retired teachers in Ghana. The study was guided by the following research objectives: Effects of family characteristics on retirement decision-making, the influence of work relationships on retirement decision-making and the strategies that can be put in place to improve retirement decision-making among teachers. A quantitative approach and descriptive survey design were used. The target population comprised teachers in public Basic schools in the Agona West Municipality. 150 teachers formed the sample for the study. Data was obtained using a self-developed questionnaire. It emerged from the findings that high financial demands stemming from home expenses, expectations from family members, and being first-borns hindered individuals’ ability to save and plan for their retirement. Also, it revealed that teachers in the Agona Swedru Municipal place considerable importance on their interactions with colleagues when it comes to retirement decision-making. It was found that teachers in the Agona Swedru Municipal place considerable importance on their interactions with colleagues when it comes to retirement decision-making. It was therefore recommended that retirement planning initiatives and financial education programmes should prioritize offering diverse and adaptable forms of psychoeducation and guidance to cater for the varying expectations and preferences of respondents. Educational institutions and policymakers should encourage and support peer relationships to improve retirement preparedness and satisfaction among teachers in the Municipality. Prioritize and tailor retirement planning guidance and education to address the diverse preferences and needs of respondents.

Financial literacy and knowledge of the retirement income system in Canada

Abstract This paper examines financial literacy in Canada using a dataset from early 2023 that measures the knowledge of middle-aged Canadians regarding their retirement income system. We first document important financial literacy differences across gender, age, education, and labor market status. Using detailed questions on the four main aspects of the retirement income system, we then show a strong correlation between financial literacy and the knowledge of the retirement system in Canada. Finally, we provide evidence that general financial literacy and knowledge of the retirement system matter for retirement preparation, by showing that Canadians with higher financial literacy scores and better knowledge of the retirement system are more likely to have a plan for retirement.

Household financial literacy and retirement planning in rural China

Amid the prevailing importance of discussing rural villagers' retirement in China, this study analyzes the relationship between the financial literacy of rural residents and their plans for retirement. Using in-depth survey data from the Greater Bay Area, this work examines the region's demographic structures and presents the different levels of rural residents' financial literacy. The findings are robust and indicate a positive correlation between financial literacy and retirement planning. The examination also reveals the moderating role of risk attitudes to explain how financial literacy influences plans for retirement. Subsequent programs for rural residents can enhance their financial literacy, address issues regarding retirement, and collectively attain shared prosperity.

Public Sector Employees’ Arrangement and Plans Towards Retirement in Ghana

As a saying goes, if one fails to plan, that individual plans to fail. This well-known saying holds true relative to retirement that formal sector employees experience at a point in their life time. It is also a truism that effective and efficient retirement planning by employees is contingent on the information about retirement they receive. Although myriad of studies have been conducted on retirement experiences of formal sector employees, the specific activities that employees do for their retirement had attracted less research attention. The study aimed to close the gap identified, which is quintessential for the information, education and action of employees, employers, psychologists and counsellors. The study focused on employees of the Ghana Health Service (GHS) and Ghana Education Service (GES) in two municipalities. Stratified and simple random sampling procedures were adopted to select the employees to participate in the study. To garner the requisite data to achieve the study objectives, a questionnaire was designed, pre-tested and used. The data gathered were analysed using descriptive statistical tools. It emerged from the study that the employees’ principal sources of information on retirement are the media, private insurance companies, Social Security and National Insurance Trust (SSNIT), friends and relatives. It also emanated from the study that most of the employees were doing the following for their retirement: investment in shares, bonds, treasury bills and insurance policies; savings and standing orders. Stakeholders of the two services need to do more to help their employees to prepare well for an enhanced livelihood during retirement.

A simulation model to analyze the behavior of a faculty retirement plan: a case study in Mexico

AbstractThe main goal in this study was to determine confidence intervals for average age, average seniority, and average money-savings, for faculty members in a university retirement system using a simulation model. The simulation—built-in Arena—considers age, seniority, and the probability of continuing in the institution as the main input random variables in the model. An annual interest rate of 7% and an average annual salary increase of 3% were considered. The scenario simulated consisted of the teacher and the university making contributions, the faculty 5% of his salary, and the university 5% of the teacher’s salary. Since the base salaries with which teachers join to university are variable, we considered a monthly salary of MXN 23 181.2, corresponding to full-time teachers with middle salaries. The results obtained by a simulation of 30 replicates showed that the confidence intervals for the average age at retirement were (55.0, 55.2) years, for the average seniority (22.1, 22.3) years, and for the average savings amount (329 795.2, 341 287.0) MXN. Moreover, the risk that a retiree of 62 years of age and more of 25 years of work, is alive after his savings runs out is approximately 98% and this happens at 64 years of age.

Information Transmission in Groups: Peer Influence in High-Stakes, Irreversible Financial Decisions

Abstract We study the influence of workplace peers on a high-stakes, irreversible retirement plan choice. Mid-career U.S. military personnel choose between higher future pension pay-outs, or an immediate bonus plus lower future pay-outs. With peers defined as those who have locked-in their choices and personnel assignment rules ensuring that peer groups are exogenously formed, we capture the causal impact of peers. Greater peer take-up of the bonus, which is difficult to compare to the alternative plan but often extremely costly over one's lifetime, discourages choosers from selecting the bonus. Peers are especially impactful within professional, race, and gender groups.

Financial literacy and its influence on financial decision: a bibliometric approach

Financial literacy is critical in influencing financial decisions, particularly in today's complex financial market where individuals are constantly confronted with a diverse range of financial goods, complex investing possibilities, and ever-changing economic situations. The significance of making informed and wise financial decisions, including budgeting, savings, investments, and retirement planning, cannot be overstated. This prompts a gaining interest in financial literacy and its impact on financial decisions. More researchers are looking into various facets of financial literacy and how it affects individual’s and society’s financial well-being, subsequently paving the way for a better knowledge of this vital topic. Therefore, this study aims to highlight the current research trend on financial literacy influencing financial decisions. It involved a bibliometric analysis of data retrieved from the Scopus database by focusing on keywords related to financial literacy and financial decision-making. A total of 417 relevant documents were obtained for detailed analysis. Several analytical tools were used in this study, including Microsoft Excel for frequency analysis, VOSviewer for data visualization, and Harzing's Publish or Perish for citation metrics and analysis. The results were presented using typical bibliometric indicators, such as publication year, keyword analysis, geographical distribution, authorship, active institutions, and citation analysis. The findings showed a significant increase in financial literacy publications since 2014, highlighting the growing relevance of financial literacy and its broader societal impacts.

Not Just One Long Vacation: Revisiting the Importance of Lifestyle Planning in the Transition to Retirement.

There is a need to further understand the nature and role of planning for one's lifestyle in retirement. The purpose of this study was to examine retirement planning and how it impacts perceived preparedness and satisfaction with the retirement transition, as well as to explore personal experiences of retirement. Canadians (n=748) fully or partly retired participated in an online survey that included quantitative questions about perceived retirement preparedness and satisfaction and open-ended questions about retirement goals, fears, challenges, and advice. Results determined that while both financial and lifestyle planning were significant predictors of higher perceived preparedness, only lifestyle planning was a significant predictor for satisfaction. Overall, no gender differences were detected. Open-ended comments highlighted the importance of planning for one's lifestyle in retirement, including meaningful activities and social connections. Individualized career advising as well as group-based educational programs or peer-assisted learning initiatives appear warranted to support people in planning for their lifestyle in retirement.

Examining U.S. Millennial Retirement Plan Participation Decisions: The Roles of Employer Contributions and Automatic Enrollment

Examining U.S. Millennial Retirement Plan Participation Decisions: The Roles of Employer Contributions and Automatic Enrollment