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Financial Literacy and Retirement Planning in the Netherlands

  • Maarten van Rooij
  • Annamaria Lusardi
  • Rob Alessie

The complexity of financial decisions households are faced with has increased tounprecedented levels. At the same time, recent research documents large differences ineconomic knowledge among households and indicates that household financial skills may beinadequate to cope with the increasing responsibility for making retirement decisions. In thispaper, we examine the relationship between financial knowledge and retirement planning inthe Netherlands. For this purpose, we have designed a customized module for the DNB (DeNederlandsche Bank) Household Survey. We identify a strong and positive associationbetween financial knowledge and retirement planning. Using information on economicseducation when young, we show that the nexus of causality goes from literacy to planningrather than the other way around.ÂÂÂ

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File URL: http://www.dnb.nl/binaries/231%20Financial%20Literacy%20and%20Retirement%20Planning%20in%20the%20Netherlands_tcm46-225547.pdf
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Paper provided by Netherlands Central Bank, Research Department in its series DNB Working Papers with number 231.

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Date of creation: Dec 2009
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Handle: RePEc:dnb:dnbwpp:231
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