Retirement plans and saving decisions: the role of information and education
AbstractIncreasingly, individuals are being required to take more responsibility for their own retirement saving. Lifecycle theories of resource allocation provide a framework to examine work, retirement, consumption, and saving decisions. However, optimal decision making requires adequate knowledge of financial mathematics, risk and return properties of investments, and expectations concerning wage growth and tax policy. This paper explores the response of individuals to financial education seminars. Using data from three surveys of participants in seminars offered by TIAA-CREF, we estimate changes in retirement goals and saving behavior after the respondents have attended a seminar which discusses keep components of saving for retirement. The results indicate that financial education can produce significant changes in how individuals think and plan for retirement. Throughout the analysis, women were found to be more responsive to the seminar and were more likely to raise their desired retirement age, increase their target income replacement goal, and alter their savings behavior.
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Bibliographic InfoArticle provided by Cambridge University Press in its journal Journal of Pension Economics and Finance.
Volume (Year): 5 (2006)
Issue (Month): 01 (March)
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- Barrett, Alan & Mosca, Irene & Whelan, Brendan J., 2013. "(Lack of) Pension Knowledge," IZA Discussion Papers 7596, Institute for the Study of Labor (IZA).
- Preecha Swasdpeera & I.M. Pandey, 2012. "Determinants of personal saving: a study of salaried individuals in Thailand," Afro-Asian Journal of Finance and Accounting, Inderscience Enterprises Ltd, vol. 3(1), pages 34-68.
- Eduardo Fajnzylber, 2011. "Knowledge, Information and retirement saving decisions: Evidence from a large scale intervention in Chile," Working Papers wp_011, Adolfo Ibáñez University, School of Government.
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