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Retirement Income and Financial Market Participation in New Zealand

Author

Listed:
  • Xiaobo Xu

    (School of Economics and Management (School of Tourism), Dalian University, Dalian 116000, China)

  • Martin Young

    (School of Economics and Finance, Massey University, Palmerston North 4442, New Zealand)

  • Liping Zou

    (School of Economics and Finance, Massey University, Auckland 0745, New Zealand)

  • Jiali Fang

    (School of Economics and Finance, Massey University, Auckland 0745, New Zealand)

Abstract

Using New Zealand Household Economic Survey (HES) 2018 data, we examine the impact of direct financial market participation post-retirement on retirement income in New Zealand. Our results demonstrate the importance of post-retirement financial market participation in the enhancement of retirees’ financial well-being. We conclude that retirees who participate in the financial market enjoy a 78% increase in overall annuitised net wealth; further analysis also reveals a substantial 154% increase if government pensions are excluded from calculations of annuitised net wealth. Moreover, these retiree participants also show higher probabilities of financial-situation satisfaction. These results highlight the significant contribution to retirement income of direct financial market participation. Our paper sheds extra light on issues related to retirement financial well-being and has important implications for policy makers in New Zealand.

Suggested Citation

  • Xiaobo Xu & Martin Young & Liping Zou & Jiali Fang, 2023. "Retirement Income and Financial Market Participation in New Zealand," IJFS, MDPI, vol. 11(1), pages 1-23, January.
    • Handle: RePEc:gam:jijfss:v:11:y:2023:i:1:p:24-:d:1051305
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    References listed on IDEAS

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