July 2018

23Jul

The Retirement Belief Model: Understanding the Search for Pension Information

By Wiebke Eberhardt (Maastricht University), Elisabeth Brüggen (Maastricht University), Thomas Post (Maastricht University) & Chantal Hoet (Aegon) Many individuals avoid information relevant for retirement planning. This behavior is worrying as pension systems shift risks and responsibilities to individuals. Individuals who avoid pension information fail to discover whether they save too little for retirement, negatively affecting their long-run financial well-being. We generate knowledge about the factors that stimulate or hinder the search for pension information. Using an interdisciplinary lens, we develop...

July 23, 2018
Articles, Pension design, , ,
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07Jul

The Changing Face of Debt and Financial Fragility at Older Ages

By Annamaria Lusardi, Olivia S. Mitchell & Noemi Oggero We investigate changes in older individuals' financial fragility as they stand on the verge of retirement. Using data from the Health and Retirement Study (HRS), we compare how debt has changed for successive cohorts of people age 56–61. Our analysis shows that recent older Americans close to retirement hold more debt, and hence face greater financial insecurity, than earlier generations. This is primarily due to having bought more expensive homes with...

July 7, 2018
Aging, Articles, Labor Market, , , ,
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February 2018

12Feb

Overcoming the Saving Slump: How to Increase the Effectiveness of Financial Education and Saving Programs

By Annamaria Lusardi The great majority of working Americans are unprepared to face the difficult task of planning for retirement. In fact, the personal savings rate has been holding steady at zero for several years, down from 8 percent in the mid-1980s. Overcoming the Saving Slump explores the many challenges facing workers in the transition from a traditional defined benefit pension system to one that requires more individual responsibility, analyzing the considerable impediments to saving and evaluating financial literacy programs...

February 12, 2018
Books, Savings, , ,
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January 2018

15Jan

Nudging Financial and Demographic Literacy: Experimental Evidence from an Italian Trade Union Pension Fund

By Francesco C. Billari (Bocconi University - Department of Policy Analysis and Public Management), Carlo A. Favero (Bocconi University - Department of Finance; Centre for Economic Policy Research (CEPR)) & Francesco Saita (Bocconi University - Department of Finance) In this article, we present and test experimentally a low-cost, Internet-based, financial literacy program that we designed for implementation with the largest industrial pension fund in Italy. The program, Finlife (Financial Education and Planning for a Long Life) included 1) an instructional...

January 15, 2018
Articles, Labor Market, Savings, , , ,
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08Jan

Addressing Financial Illiteracy Through Financial Innovation: The Case for Goal-Specific Bonds the Embed Inflation and Compounding

By Arun Muralidhar (AlphaEngine Global Investment Solutions; George Washington University) Financial illiteracy is widespread and leads to bad financial decisions (high debt, insufficient savings). Individuals cannot answer basic questions about inflation, compounding, and diversification. While financial literacy can be enhanced, are individuals teachable, and if so, what should they be taught and how lasting is the training? Prof. Merton suggests that some individuals can only be helped with innovation; Prof. Richard Thaler has argued for making the financial system more...

January 8, 2018
Articles, Investing, Labor Market, Savings, Slider-Left, ,
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December 2017

30Dec

The Household Savings Paradox

By Tobias Meyll (University of Giessen - Department of Financial Services), Thomas Pauls (Goethe University Frankfurt) & Andreas Walter (University of Giessen - Department of Financial Service) Using representative data from Germany, we reveal that more than 27.3% of the population not only restrains from participating in the stock market but also refuse to invest in contractual savings and retirement products. In fact, we find that these households rely on deposits only - an investment strategy usually related to negligible...

December 30, 2017
Articles, Investing, Labor Market, Pension design, , , ,
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23Dec

Investigating the Level of Financial Literacy of University Students

By Israel J. dos S. Felipe Sr. (Universidade Federal de Ouro Preto (UFOP)), Harrison Bachion Ceribeli Sr.( Universidade Federal de Ouro Preto (UFOP)) & Lana, T. Q. (Energisa) Considering that the quality of financial decisions taken by individuals depends on their financial knowledge, abilities and attitudes, it is possible to state that the well-being of a population depends on how financially literate it is. In this context, the aim of this study was to measure the financial literacy level of...

December 23, 2017
Aging, Articles, Labor Market, , ,
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11Dec

The Power of Percentage: Quantitative Framing of Pension Income

By Henriette M. Prast (Tiburg University) & Federica Teppa (De Nederlandsche Bank) We investigate whether the quantitative frame used to communicate future pension income to plan members matters for perceived pension income adequacy. We allocate plan members randomly to one of four pension income framing conditions: annual pension income, monthly pension income, pension income as percentage of current income, pension income as decimal of current income. We find that expressing projected pension income as a percentage (decimal) of current income...

December 11, 2017
Adequacy, Articles, ,
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