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From savings to investments: How retirement consumption expectations shape household risky financial asset allocation

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  • Jing, Peng
  • Zhao, Shuchen
  • Wang, Minglu

Abstract

Effectively accumulating wealth to hedge against longevity risk is a matter of broad public interest. Using data from the 2021 China Household Finance Survey, this study examines the impact of retirement consumption expectations on household allocation of risky financial assets. The results indicate that higher retirement consumption expectations increase the proportion of risky financial assets and stocks held by households through the asset accumulation effect, the preference adjustment effect, and the knowledge enhancement effect. This impact is more pronounced among households with higher financial literacy or in regions with more developed digital financial inclusion. Further analysis reveals that rising retirement consumption expectations enhance household portfolio efficiency. However, for households with either excessive or insufficient expectations, the improvement in portfolio efficiency is limited. These findings provide new insights into promoting household participation in risky financial markets and support the rationality of investment-based retirement planning.

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  • Jing, Peng & Zhao, Shuchen & Wang, Minglu, 2025. "From savings to investments: How retirement consumption expectations shape household risky financial asset allocation," Pacific-Basin Finance Journal, Elsevier, vol. 93(C).
    • Handle: RePEc:eee:pacfin:v:93:y:2025:i:c:s0927538x25001659
    DOI: 10.1016/j.pacfin.2025.102828
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