The Role of Financial Literacy in Determining Retirement Plans
AbstractWorkers nearing retirement face many important, and often irreversible, choices. We collected detailed demographic and financial literacy data on over 1,500 workers nearing retirement at three large companies to assess how individuals are planning for retirement. Many respondents display limited knowledge and understanding of public and company-provided retirement benefits. Controlling for basic demographics and wealth, we find that misconceptions about eligibility ages and plan generosity influence workers’ expected age of retirement. Although retirement-related decisions will affect workers’ wellbeing for the remainder of their lifetimes, many do not possess enough basic financial knowledge to confidently make optimal choices.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 16612.
Date of creation: Dec 2010
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Publication status: published as THE ROLE OF FINANCIAL LITERACY IN DETERMINING RETIREMENT PLANS ROBERT L. CLARK1, MELINDA SANDLER MORRILL2 and STEVEN G. ALLEN3,† Article first published online: 28 JUN 2011 DOI: 10.1111/j.1465-7295.2011.00390.x © 2011 Western Economic Association International Issue Economic Inquiry Economic Inquiry Volume 50, Issue 4, pages 851–866, October 2012
Note: AG LS
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Find related papers by JEL classification:
- J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
- J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
- J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions
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