Retirement Savings Research Articles

Noncognitive Determinants of Retirement Saving Behavior

Noncognitive Determinants of Retirement Saving Behavior

Lessons from Behavioral Research for Retirement Saving, Investment, and Spending: An Overview

Lessons from Behavioral Research for Retirement Saving, Investment, and Spending: An Overview

Why Do Employers Establish Retirement Savings Plans? Evidence from State “Auto-Ira” Policies

Why Do Employers Establish Retirement Savings Plans? Evidence from State “Auto-Ira” Policies

잠재프로파일분석을 활용한 재산범죄피해 노인의 삶의 질 특성에 관한 연구

As soaring elderly population, the number of elderly victims of property crime has also increased. However, their victimization has affect their quality of life more negatively than other age groups because they lose their retirement savings. Thus, this study aims to examine the patterns of quality of life for the elderly victims of property crime and to compare the demographic and psychological characteristics of each pattern. We have employed Latent Profile Analysis to classify elders who experienced property crime victimization into the groups with similar characteristics. The LPA results have identified three quality of life for eldely victims profiles: 1) low quality of life with low level of trust, 2) low quality of life, 3) recovery group. The Chi-square test for examining the differences among these profile has shown that the group labeled as ‘low quality of life with low level of trust’ and ‘low quality of life’ were more psychologically compared to ‘recovery group’. Surprisingly, the two low quality of lie groups have shown higher education level than recovery group. Based on these results, we have suggested interventions considering the characteristics of each group.

FINANCIAL CAPABILITY AMONG OLDER ADULT IMMIGRANTS, A SYSTEMATIC REVIEW

Abstract The Financial Capability approach assesses individuals’ financial knowledge and behaviors within the context of opportunities in the environment. Scholars and practitioners have documented how immigration status can influence individuals’ access to and eligibility for financial products and services, due to federal, state, and community rules and norms. Those who lack immigration status (i.e., undocumented immigrants) often face additional financial hurdles. A separate line of research has shown how financial capability can influence retirement savings, yet this did not focus on immigration status. As such, this systematic review seeks to understand how variations in legal immigration status impact the financial capability and long-term financial wellbeing of older adult immigrants in the United States. The current review utilized standardized procedures and protocols to identify articles related to financial capability, immigration status, and retirement savings, resulting in an initial list of 3,599 articles. Three studies published before May 2023 were included in the final narrative synthesis due to their inclusion of immigrants over 55. Results demonstrate that financial capability studies of older adult immigrants that met eligibility criteria have centralized Asian individuals, particularly Chinese, Taiwanese, and Korean populations. Furthermore, studies indicate that increasing financial capability among older immigrants can strengthen their financial security, yet these studies focus less on the impact of immigration status. Programs, services, or products operating on the financial capability paradigm warrant continued research as older immigrants have unique attributes (e.g., language, culture) and require careful design, implementation, and evaluation of efforts seeking to target long-term financial wellbeing.

Work and income instability and retirement financial wellbeing for women and men

Financial wellbeing in retirement is contingent on realizations of financial expectations developed earlier in life and may differ substantially by gender. People’s standard of living in retirement is tied to stability in work and income trajectories during working years along with retirement benefits and savings. Women have a greater overall income disadvantage relative to men, including reduced life course labor force exposure that may restrict retirement savings and benefits. Using the Canadian Longitudinal and International Study of Adults (LISA) and 20 years of linked tax record data (N = 2,353), we explore the association between instability in work and income histories and lower perceived retirement standard of living (PRSOL), net of retirement benefits, for women and men in Canada. Results show that for women, life course effects shaping PRSOL are driven by cumulative disability exposure and bouts of social assistance. For men, PRSOL is influenced more by cumulative unemployment. Although retirement benefits do not offset histories of work and income instability for either gender, income assistance is protective for women in retirement while personal investments are protective for men. Overall, our findings suggest that despite Canada’s relatively generous pension program in later life, life course instability in work and income have persisting, gendered effects on financial wellbeing in retirement that underscore financial and health disadvantage for women across the life course.

ESTIMATING THE ECONOMIC VALUE OF FAMILY CAREGIVING AT A NATIONAL AND STATE LEVEL

Abstract The 2023 update to the Valuing the Invaluable series estimates the economic value of unpaid, family caregiving in America at $600 billion in 2021. This is the latest estimate in almost 20 years of work tracking the economic value of family caregiving in the U.S. The Valuing the Invaluable series of reports uses a meta-analysis approach drawing on various surveys of family caregivers to produce estimates at the state and national levels of the numbers of caregivers, the hours of care they provided, the average economic value of that care per hour, and the total economic value of all caregiving provided in that year. This presentation will detail the methodology for this meta-analysis, the 2021 national estimate of the economic value of caregiving, and variation in state-level estimates of the economic value of caregiving. While this estimated economic value of caregiving seeks to be comprehensive, it does not account for opportunity costs tied to forgoing work or scaling back work because of caregiving, out-of-pocket costs of caregivers, or foregone retirement savings of caregivers. These limitations will be discussed and the direction they offer for future work understanding the full value of unpaid caregiving contributions to the LTSS system and the state and federal budgets.

RISK-RELATED FACTOR AND FINANCIAL ATTITUDE ON RETIREMENT SAVING BEHAVIOR

Purpose – This research aims to analyze the influence of retirement risk-related factors and financial attitudes on saving behavior for retirement. Methodology – The research was organized using 400 Thai employees in various occupations. This research analysis method was occupied by operating on structural equation modeling (SEM) Amos. Results – The finding pointed out that risk-related factors have a positive effect on retirement saving behavior (0.441), and financial attitude has a positive influence on retirement saving behavior (0.750).Implications – Workers should rely on risk-related factors and financial attitude factors to be successful in retirement savings. Also, this research helps people to realize and understand more about the relationship between risk-related factors, financial attitude, and retirement saving behavior. This empirical study makes a contribution in the form of a comprehensive model to explain risk-related factors and financial attitudes toward retirement saving behavior.Originality/Value – This analytical framework reveals the relationship of financial attitudes and risk-related factors on retirement saving behavior. This article helps to investigate the effective factor on the retirement saving behavior for Thai retirement perspective.

The Eternal Youth Fallacy in the Face of a Pandemic: Senior Spending Patterns and the Silver Economy in the United States

Population ageing in the United States has resulted in a substantial increase in retiree households. Understanding consumer behaviour among older individuals is crucial for assessing their well-being and living conditions. This study emphasises the importance of recognising the unique needs and preferences of older consumers, as their consumption patterns have a significant influence on household expenditures. While the stereotype of frugal retirees has evolved and active seniors are now portrayed as high spenders, the Covid-19 pandemic highlighted seniors' practical and realistic approach to their spending and challenged the popular notion of a lifestyle of forever-young seniors. Seniors still prioritise essential goods and services. During the pandemic, health-related expenditures increased, and they adapted their leisure activities to home-based alternatives. Our study investigates whether pre-retirees and retirees have shifted from prioritising retirement savings to focusing on essential needs like healthcare and housing, or whether they are allocating resources for experiences and travel to enhance their quality of life before and after retirement. Seniors exhibit distinct consumption patterns, with higher expenditures on health, personal care, and leisure activities than younger age groups. Consequently, businesses and policymakers need to develop strategies that account for the diverse consumption patterns of seniors, rather than assuming they will adopt the preferences of younger generations. The silver economy represents a dynamic and expanding market, particularly in the health and social care sector, offering substantial opportunities for investment.

ESG, Public Pensions, and Compelled Speech

Investing based on Environmental, Social, and Governance (“ESG”) principles has dramatically increased in recent years. Many institutional investors— including public pension funds funded by mandatory contributions from government employees—now incorporate ESG principles into their investment and engagement strategies even though certain aspects of ESG, such as investing to reduce carbon emissions, are politically controversial. Over this same period, courts have reaffirmed that the First Amendment protects individuals from being compelled to associate with or to subsidize the speech of third parties. Indeed, applying this compelled speech doctrine, the Supreme Court recently overruled a forty-year-old precedent that allowed states to force nonunion members to contribute to public unions engaged in collective bargaining on their behalf.
 This Article provides the first in-depth discussion of how the Court’s compelled speech doctrine might apply both in the wake of the Supreme Court’s landmark decision in Janus v. AFSCME and in light of the dramatic rise of ESG investing. In doing so, it explains how the Supreme Court’s post-Janus compelled speech doctrine will likely render state mandates requiring employees to contribute to public pension funds that invest according to ESG principles unconstitutional. And this Article also identifies two potentially serious consequences of the unconstitutionality of such mandates that current scholarship does not address. First, application of the compelled speech doctrine to public pensions may cause state and local governments significant financial distress, given that state employees might be able to withdraw all contributions (not just future contributions) to the public pension funds even as many of those funds are substantially underfunded. Second, extending the compelled speech doctrine to ESG investing might further hamper efforts to increase retirement savings among those least likely to save for retirement by precluding auto-enrollment of employees in retirement programs that invest according to ESG principles. Finally, this Article sketches some possible approaches to addressing these issues before concluding.

The Introduction to Behavioral Economics and Its Widespread Use across Different Areas of Economics and Policymaking

In exploring the realm of behavioral economics, we find that traditional economic theories often overlook the intricacies of human psychology. Behavioral economics can be perceived as a compelling intersection of psychology and traditional economics. Rather than always acting rationally, individuals are influenced by cognitive biases, heuristics, and framing effects. These insights from behavioral economics have broad applications, spanning from personal finance to comprehensive public policies. Policymakers and economists alike now integrate behavioral perspectives to design more effective interventions. By recognizing human tendencies, we can nudge individuals towards better decisions, thereby enhancing societal welfare. Examples of such applications include reframing retirement savings options, devising strategies for improved tax compliance, and crafting initiatives to decrease energy consumption. Through these insights, we emphasize the potential of behavioral economics to craft a more informed and efficient approach to addressing economic challenges. Behavioral economics has a transformative power that goes beyond traditional economic frameworks. By merging psychological insights with economic principles, we gain a multifaceted perspective that enables us to navigate these complexities more adeptly.

Gender and Risk-Taking in the Building of U.S. Retirement Wealth

AbstractThe growing weight being placed on self-directed retirement accounts within the United States retirement income policy framework, and the time inconsistency challenge of individuals, particularly women, tending to under-invest in retirement savings accounts motivated the current work. Using data from the United States Federal Reserve Board’s Survey of Consumer Finances, for a period spanning from 1989 to 2019, 11 cross-sections of data, the paper investigated the role of gender in United States retirement risk-taking investment strategies of single (never married) individuals. The analysis documented increasing trends in the risk-taking of both single women and single men but recorded differences in the risk-taking profiles of the two groups, with single men taking more risk than single women in their retirement wealth building in most cross-sections, with the gender risk-taking gap dropping, nonetheless, algebraically in magnitude from 1989 to 2019.

FINANCIAL LITERACY AND ENTREPRENEURSHIP-BUSINESS STARTUP FOR EFFECTIVE POST-RETIREMENT LIFE MANAGEMENT AMONG PRE-RETIREES IN UNIVERSITIES IN EDO STATE, NIGERIA

The role of entrepreneurship to prevent poverty and mitigate other post-retirement challenges has been acknowledged to be crucial for effective post-retirement life management but financial constraints could constitute bane to pre-retirees’ entrepreneurial intentions. Therefore, the study determined the financial knowledge that could spur their intentions and readiness for business start that could enable them surmount post-retirement life challenges. Two research questions guided the study. The descriptive survey research design was adopted and the population comprised all the pre-retirees in universities in Edo State. 250 respondents were randomly selected using the simple random sampling technique from three purposive selected universities. Primary data were gathered through the use of structured questionnaire which was validated and tested to have reliability coefficient value of 0.84. The descriptive statistics of mean and standard deviation were used to answer the research questions and test the respondents’ homogeneity. The findings revealed among others that the respondents perceived the benefits of entrepreneurship-business startup to ensure their effective post-retirement life management but intend to rely totally on their retirement savings benefits with the Contributory Pension Scheme (CPS) for business startup. Based on the findings it was recommended among others that pre-retirees should make contingency savings plan and that the employers and government should provide them financial education in order to acquaint them with relevant financial knowledge to access other forms of business financing such as loans, bank overdraft, angel investors, venture capital and government grants among others prior to final disengagement.

Student loan debt in retirement: identifying the correlates and implications for policy, practice and research

PurposeResearch shows that having student loan debt in retirement is associated negatively with life satisfaction, suggesting that student debt is a bane of retiree well-being. The rationale for this study is to determine the factors related to owing student debt in retirement, given the adverse effects on the well-being of retired households.Design/methodology/approachThe study utilizes pooled cross-sectional data from the 2015 and 2018 U.S. National Financial Capability Study. The empirical analysis uses a sample of retired Americans aged 65 years and older (N = approximately 8,000) and estimates two-block logistic regression models to examine the effects of demographic, socioeconomic and behavioral factors on student loan indebtedness in retirement. A sensitivity analysis is performed for the subsample of retirees holding student debt for their children's education. Statistical interpretations use odds ratios.FindingsThe findings indicate that financial literacy, age, homeownership and high subjective financial knowledge are associated with a low likelihood of holding student loan debt in retirement. However, being Black, having postsecondary education, having difficulty covering expenses, having financially dependent children, having high-risk preferences and spending more than income increase the likelihood of holding student debt in retirement. The ensuing discussion will assist financial planners and educators identify practical ways to shape decisions regarding student loan debt in retirement.Research limitations/implicationsThe amount of student loan debt is unavailable in the dataset for analysis. One cannot infer causal relations from the study. The factors examined do not reflect the time the student loan was obtained.Originality/valueThe study focuses on the determinants of student loan indebtedness among retired Americans rather than young adults or older adults on the verge of retirement. The paper enhances the understanding of student loan holdings in the decumulation phase of the life cycle. Many US individuals have low retirement savings from which they draw a retirement income. The more the student debt burdens on retired Americans, the greater the likelihood of outliving their resources and experiencing poverty.

An Empirical Analysis of The Impact of Money Attitudes on Retirement Savings Behaviour in Malaysia

Saving for the future, especially for life after retirement, is a critical issue often debated. Early savings planning needs to be paid serious attention to ensure a good and comfortable life after retirement. However, behaviour towards savings for retirement is related to money attitude as it is how an individual behaves or reacts to money. Each person is believed to have different views and behaviours towards money and income, especially regarding retirement savings. As such, this study aims to investigate the effect of money attitudes on retirement savings behaviour. The survey approach was employed and conducted using questionnaires developed by adopting several studies and then randomly distributed via an online platform. A total of 160 respondents from 250 targeted respondents successfully answered the questionnaire and were used for further analysis. The collected sample suggested a successful response rate of 64%, more than enough to allow for population-wide generalisation of the findings. The analyses conducted were the pilot test for the initial screening of the items in the questionnaire, descriptive statistics, multicollinearity test, and the ordered Probit model. This study revealed mixed findings on the relationship between the type of money attitudes and retirement savings behaviour, indicating that people with different attitudes towards money will have different perceptions of savings for retirement.

The perfect withdrawal amount over the historical record

What has been the perfect withdrawal amount (PWA) from retirement savings accounts in long- term historical data? The PWA is that which, if taken out in the first year of retirement and used again every year adjusted by inflation, leaves exactly the desired final balance on the account. We present the formula for obtaining this measure and evaluate the values it has taken in the past under varying combi- nations of the relevant parameters. We find that safety-minded investors should enter retirement with a higher stock allocation than what is currently used in most investment funds designed to provide income during retirement.

Investor decision making within retirement savings schemes

We study the investment allocation decisions of over 32,000 investors in a retirement savings program using data from 1994 to 2019. Investors exhibit a “reduce risk or increase risk response” when faced with signals of increased market volatility. Investors behave as if they perceive patterns in prices. Different age cohorts display different decision-making “cultures”, but all age groups display a bias towards choosing less risky allocations rather than riskier strategies. Our findings suggest that behavioral biases can contribute to lower superannuation balances being available to people when they retire.

Measures to Encourage Retirement Savings in China The Role of Loss Aversion

As the aging of population and the lack of sufficient funds for a comfortable retirement life, saving for retirement is becoming increasingly important. Peoples decisions about retirement savings are influenced by cognitive biases and heuristics, such as loss aversion. This paper examines the impact of loss aversion on pension savings in China. Chinas pension reserves are slightly insufficient, and defined-benefit schemes put pressure on the government and fail to enable people to maintain their original standard of living after retirement. Therefore, this paper proposes the inclusion of save more tomorrow and annuities to address these problems. This paper also suggests simplifying the process of increasing pension savings, choosing an appropriate retirement savings rate, and diversifying investment portfolios. It highlights the need for individuals and policymakers to plan and prepare for demographic change and the impact of loss aversion on retirement savings. Recommendations are made to improve retirement savings to ensure a secure and sustainable future for all.

Demographic Challenge: The Rise of the Silver Economy in China

This paper explores the silver economy in China. The aging demographic in China has created challenges and opportunities for the economy. Based on analyzing extant literature relating to the silver economy, this research highlights the growth of the healthcare industry, tourism, and technology as significant areas of the silver economy. However, challenges like the lack of retirement savings and limited access to resources in rural areas are also discussed. The Chinese government has implemented policies to support the industry, such as tax breaks, subsidies, and programs to promote the development of retirement communities and long-term care facilities. The essay concludes that while the silver economy is becoming increasingly important in China, more efforts may be needed to address these challenges and ensure the industry's continued growth. This research is helpful for policymakers, businesses, and other stakeholders to develop strategies to adapt to these changes and harness the potential of the growing older population.

Suboptimal Rootzone Growth Prevents Long Island (NY) Salt Marshes from Keeping Pace with Sea Level Rise

Salt marsh habitat loss and conversion are well documented across the marine-coastal district of New York. Regionally, these losses are characterized by marsh edge erosion, ditch and creek widening, internal ponding, and conversion from irregularly flooded marsh to regularly flooded marsh and intertidal mudflats. These changes in horizontal extent and shifts in vegetation composition suggest that NY’s salt marshes may not be keeping pace with sea level rise. To evaluate elevation building processes, deep rod surface elevation tables, marker horizons, and shallow rod surface elevation tables (SET-MHs and shallow RSETs) were installed as a network across Long Island, NY. Contributions of surface, shallow subsurface, and deeper processes to overall elevation changes were observed from 2008 to 2022. Using a linear mixed model approach, surface accretion, shallow subsurface rootzone growth, and deeper below-ground processes were evaluated against regional sea level rise, nutrient loading, and marsh area trends. We found that marshes on Long Island are not keeping pace with sea level rise because they lack vertical elevation growth within the rootzone. Optimizing conditions for belowground growth of native salt marsh plants and preservation of organic matter within the peat matrix is key for restoring salt marshes to a positive elevation trajectory relative to sea level rise. Much like a retirement savings account, knowing whether our marshes are increasing in elevation is important, but understanding the full suite of deposits and withdrawals is critical for managing this valuable resource for the future.