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Indulgence, Self-Control, and Annuity Preferences: Annuity Choices by Members of the Slovak-Funded Private Pension Pillar

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  • Vladimír Baláž

    (Centre of Social and Psychological Sciences, Slovak Academy of Sciences, Šancová 56, 811 05 Bratislava, Slovakia)

Abstract

This paper employs data from an original survey to analyse the annuity preferences of members of the Slovak-funded private pension pillar. The focus is on the impact of socioeconomic variables as well as various behavioural attitudes upon annuitisation decisions. The research first considers some well-known behavioural factors (framing, mental accounting) and then turns to some underresearched traits (indulgence, self-control) and behaviours (compulsive shopping, saving habits) and links them to annuity choices. Moreover, the research studies alternative allocations of a lump sum and relates them to annuitisation decisions. Indulgence emerged as a significant negative predictor of annuitisation. This result likely refers to preferences towards hedonic lifestyles in early retirement. Interestingly, low self-discipline was also significant but positively related to an intention towards annuity purchases. People who are aware of their low financial discipline may introduce internal self-protection mechanisms and resort to tried and tested financial products to avoid anticipated feelings of regret and desperation. Annuitisation, in this case, is a regret avoidance behaviour.

Suggested Citation

  • Vladimír Baláž, 2023. "Indulgence, Self-Control, and Annuity Preferences: Annuity Choices by Members of the Slovak-Funded Private Pension Pillar," Social Sciences, MDPI, vol. 12(3), pages 1-17, March.
    • Handle: RePEc:gam:jscscx:v:12:y:2023:i:3:p:190-:d:1103184
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    References listed on IDEAS

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