February 2023
01Feb

Financial literacy, longevity literacy, and retirement readiness

By Paul Yakoboski, Annamaria Lusardi & Andrea Hasler Six years of data from the TIAA Institute-GFLEC Personal Finance Index (P-Fin Index) clearly demonstrate that U.S. adults with greater financial literacy tend to have better financial well-being. This report shows that retirement readiness, a specific realm of financial well-being, likewise tends to be better among those with greater financial literacy. In addition, it shows that retirement readiness is also related to longevity literacy. While typically an overlooked factor, the importance of...

February 1, 2023
Articles, System Sustainability, , , ,
Read more...

January 2023
26Jan

Gender-Inclusive Financial and Demographic Literacy: Lessons from the Empirical Evidence

By: Giovanna Apicella, Enrico G. De Giorgi, Emilia Di Lorenzo & Marilena Sibillo Longevity crucially affects demand for pensions, insurance products and annuities. Consistent empirical evidence shows that women have historically experienced lower mortality rates than men. In this paper, we study a measure of the gender gap in mortality rates, we call “Gender Gap Ratio”, across a wide range of ages and for four countries: France, Italy, Sweden and USA. We show the stylized facts that characterize the trend...

January 26, 2023
Articles, Pension design, ,
Read more...
26Jan

Should Labor Abandon Its Capital? A Reply to Critics

By: David H. Webber Several recent works have sharply criticized public pension funds and labor union funds (“labor’s capital”). These critiques come from both the left and right. Leftists criticize labor’s capital for undermining worker interests by funding financialization and the growth of Wall Street. Laissez-faire conservatives argue that pension underfunding threatens taxpayers. The left calls for pensions to be replaced by a larger social security system. The libertarian right calls for them to be smashed and scattered into individually-managed...

January 26, 2023
Articles, Labor Market, Pension Management, , , ,
Read more...
24Jan

Financial regret at older ages and longevity awareness

By Abigail Hurwitz & Olivia S. Mitchell Older people often express regret about financial decisions made earlier in life that left them susceptible to old-age insecurity. Prior work has explored one outcome, saving regret, or peoples’ expressed wish that they had saved more earlier in life. The present paper extends attention to five additional areas regarding financial decisions, examining whether older Americans also regret not having insured better, claimed benefits and quit working too early, and becoming financially dependent on...

January 24, 2023
Articles, Savings, , ,
Read more...
18Jan

Immigrant Swan Song

By Giovanni Peri The immigration debate often focuses on culture, identity, and the economy. In countries such as the Australia, Canada, and the United States where many immigrants—especially those who have moved for economic reasons—assimilate into the labor force quickly, the case for more immigration is built on its potential economic benefits. Research shows that immigration does not reduce the capital intensity of the economy, but rather it allows firms to expand and investments to adjust, and it also promotes...

January 18, 2023
Articles, Labor Market, ,
Read more...
18Jan

Investment Risk Minimization and Optimization of Future Pension Plans

By Peter Vodička Thesis is a collection of three papers with several contributions to the optimisation of future pension plans for the long-term savers while minimising their investment risk. Since pillar aim is to improve the transparency of the pension funding, we develop investment strategies for individual savers which are easy to understand whilst at the same time performing optimally, or near optimally. Furthermore, all investment prospects are communicated in real terms. Principal investment strategy introduced in the thesis is called...

January 18, 2023
Articles, Investment, Pension Management, ,
Read more...
18Jan

A Behaviorally Informed Financial Education Program for the Financially Vulnerable: Design and Effectiveness

By Ernst-Jan de Bruijn, Gerrit Antonides & Tamara Madern Financially vulnerable consumers are often associated with suboptimal financial behaviors. Evaluated financial education programs so far show difficulties to effectively reach this target population. In our attempt to solve this problem, we built a behaviorally informed financial education program incorporating insights from both motivational and behavioral change theories. In a quasi-experimental field study among Dutch financially vulnerable people, we compared this program with both a control group and a traditional program group....

January 18, 2023
Articles, Pension design, ,
Read more...
18Jan

Choosing Pension Fund Investment Consultants

By Aleksandar Andonov, Matteo Bonetti & Irina Stefanescu Pension funds rely on the advisory services of investment consultants for asset allocation decisions, manager selection, and performance benchmarking. While prior research finds that consultants generally do not add value, pension funds have increased the number of consultants over time, particularly in alternative assets, such as real assets, private equity and hedge funds. We explore the factors underlying the hiring and firing of consultants and examine whether these decisions are made in the...

January 18, 2023
Articles, Pension Management,
Read more...
13Jan

The Effect of Required Minimum Distributions on Intergenerational Transfers

By: Jonathan M. Leganza How do households use retirement savings accounts in retirement? The answer to this question is important for tax policy pertaining to retirement savings. I shed light on this question by studying how households respond to Required Minimum Distribution (RMD) regulations, which mandate withdrawals from retirement accounts upon reaching a specified age. Using data from the Health and Retirement Study and a regression discontinuity design, I estimate the causal effects of aging into RMD regulations. First, I...

January 13, 2023
Articles, Savings, ,
Read more...
13Jan

Long-Term Real Dynamic Investment Planning

By Russell J. Gerrard, Munir Hiabu, Jens Perch Nielsen & Peter Vodička When long-term savers plan for retirement they need to know their investment prospects in terms of real income (Merton, 2014). While inflation has traditionally been considered as a complication in financial analysis and financial practise, we obtain enhanced predictability and model fit if the real returns are targeted in conjunction with earnings-by-price minus inflation as predictor. For this latter case, we propose an investment strategy of updating the...

January 13, 2023
Articles, Investment, ,
Read more...