November 2020

24Nov

Lack of Financial Literacy May Deter Retirement Plan Participation

The results of a recent survey reveal that most Americans, including retirement plan participants, failed a fluency quiz of key investment selection terms, which can translate into saving less and lower use of investment products. Hearts & Wallets’ “Financial Fluency: What Consumer Understanding of the Language of Finance Means for Advice, Retirement and Asset Management” finds that only 19% of Americans achieved a passing grade when asked to choose the best answer for seven key investment selection...

November 24, 2020
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October 2020

15Oct

Financial Literacy and Financial Decision-Making at Older Ages

By Joelle H. Fong, Benedict S. Koh, Olivia S. Mitchell, Susann Rohwedder How well older households manage their wealth holdings is an important determinant of their financial security during retirement, yet little is known about their financial decision-making and how this relates to their financial literacy. Our paper fills this gap by measuring financial literacy among older persons in the Singapore Life Panel and examining its association with timely credit card debt repayment, stock market participation, and age-based investment...

October 15, 2020
Aging, Articles, ,
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02Oct

Fintech and Financial Literacy in the Lao PDR

By Peter Morgan, Long Q. Trinh A growing literature has examined the role of financial literacy in an individual’s income, saving behavior and the use of various financial products. However, so far, no one has examined the relationship between financial literacy and the awareness and adoption of financial technology (fintech) products, i.e., financial products provided via internet-based and mobile-based platforms. This paper examines this relationship in a developing country, the Lao People’s Democratic Republic (PDR). We use information collected...

October 2, 2020
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September 2020

24Sep

Financial education: Current practices and future challenges

By Kristof De Witte, Oliver Holz, Kenneth De Beckker In a world where individuals become increasingly responsible for their financial well-being, and where the complexity of financial markets and products is growing, financial education becomes crucial. Although it is well accepted to introduce financial education in compulsory education, there is no consensus on the optimal way to implement financial education. This book explores the current state and the future challenges of financial education in five European countries: Belgium,...

September 24, 2020
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August 2020

21Aug

Financial Knowledge Overconfidence and Early Withdrawals from Retirement Accounts

By Sunwoo T. Lee, Sherman D. Hanna Early distributions from retirement accounts could endanger future retirement income security, and the U.S. has restrictions to discourage them, including possible tax penalties. On the other hand, tapping one’s retirement assets may be rational when an individual encounters financial hardship. With the 2020 Coronavirus Aid, Relief, and Economic Security Act (CARES Act), early distribution from retirement accounts became an even more attractive option to individuals. In this study, we examined factors related...

August 21, 2020
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July 2020

16Jul

FLF Africa launches Financial Literacy for Coronavirus Alleviation programme

The Financial Literacy Foundation Africa has launched a Financial Literacy for Coronavirus Alleviation programme (FLICA) which aims to provide education on how to handle economic and financial hardships arising from the Covid-19 pandemic. This continental project will take place in all 46 countries in sub-Saharan Africa and aims to achieve financial independence for eight out of every ten individuals by 2030. “The strategic approach will address attitudinal and behavioral barriers to our goal of financial wellness through public education...

July 16, 2020
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June 2020

25Jun

South Africa: UCT Urged to ‘Prioritise Mentorship’

When Malizole Mdlekeza was a youngster, children his age dreamed of becoming doctors and engineers. But he dreamed of becoming the next Michael Schumacher or Lewis Hamilton. Mdlekeza simply loved the thrill of racing cars and turning this passion into a career was once on the cards. A lot has changed since then, and let's just say his other love - actuarial science - took pole position when this maths and science buff chose his career path at the...

June 25, 2020
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April 2020
03Apr

How People React to Pension Risk

By Nicolas Salamanca, Andries de Grip, Olaf Sleijpen We show that people exposed to greater pension risk are less likely to invest in risky assets. We exploit a reform that links people's future pension benefits to their pension funds' funding ratio—a measure of the fund's financial health—making funding ratios a fund-specific measure of pension risk. The effect of pension risk is stronger for people who are better informed about their pensions, for retirees and pension-age non-retirees, and for wealthier...

April 3, 2020
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December 2019

20Dec

Debt Close to Retirement and Its Implications for Retirement Well-being

By Annamaria Lusardi, Olivia S. Mitchell, Noemi Oggero We analyze debt and debt management of Americans nearing retirement age. We show that older people have numerous financial obligations that can lead to financial distress. Using data from the 2015 National Financial Capability Study and an extensive literature review, we show that lack of financial literacy, lack of information, and behavioral biases help explain the prevalence of debt later in life. Our evidence indicates that debt at older ages can...

December 20, 2019
Aging, Articles, Pension design, , , ,
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November 2019

04Nov

Behind the Success of Dominated Personal Pension Plans: Sales Force and Financial Literacy Factors

By Giuseppe Marotta (Department of Economics Marco Biagi and CEFIN) The revealed preference for dominated insurance-based personal pension plans in Italy is a decade-long puzzle. I surmise that a motivation from the supply side is a sales force factor deriving from the geographical distribution of financial providers, including the countrywide network of the state controlled Post Office. I provide supporting evidence using three biennial waves of the Bank of Italy’s survey on household finances from 2010 to 2014. The time...

November 4, 2019
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