March 2021
04Mar

Fraudsters prey on the fears of China’s aging population.

Shady retirement home and investment schemes have cheated China’s rapidly aging population out of hundreds of millions of dollars, spurring more than a thousand criminal cases in recent years. In a society that traditionally relied on family members to take care of elderly parents, fraudsters have been able to prey on fears that changing social norms and scarce resources will leave older people bereft, report Alexandra Stevenson and Cao Li for The New York Times. By 2025, more than 300 million...

March 4, 2021
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June 2020
25Jun

Saving Through a Crisis: How LMI Retirement Plan Participants Are Weathering COVID-19

By Warren Cormier, DCIIA, Nick Maynard & Sylvia Brown In the months since the outbreak of COVID-19, the pandemic has continued to expose and exacerbate cracks in people’s financial lives. In our latest research, Commonwealth partnered with the Defined Contribution Institutional Investment Association’s (DCIIA) Retirement Research Center on a series of surveys to better understand how low- to moderate-income (“LMI”) plan participants are handling their retirement savings during the pandemic and the impact to their financial security. ...

June 25, 2020
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June 2019

07Jun

Financial Literacy and Financial Education: Theory and Survey

By Beata Swiecka, Aleksandra Grzesiuk, Dieter Korczak It is a well-known saying that money does not buy happiness. But it certainly helps in life. It is important to have enough of it to satisfy our needs and to secure ourselves from emergency situations. That's what adults think. And what about the youth? What is their approach to money, what do they know about finances and how are their skills in everyday financial management coming along? What kind of...

June 7, 2019
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May 2019

10May

How Financial Literacy Impacts Retirement Savings: The Role of Present Bias and Exponential Growth Bias

By Kanin Anantanasuwong Lack of saving for retirement is a major issue, especially in soon-to-be ageing societies. In this paper we examine the impact of financial literacy on retirement savings, as well as its effect on present bias and exponential growth bias, which have been identified as detrimental to savings in previous studies. We find that better financial literacy is related with a more accurate perception of exponential growth, which stimulates retirement savings. In addition, financially literate individuals are...

May 10, 2019
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10May

Financial Literacy and Saving for Retirement among Kenyan Households

By Teresa Schützeichel In this paper I examine financial literacy and saving for retirement in Kenya using the household survey of 2016 from FinAccess Kenya. I use probit regressions to determine the effect financial literacy has on individuals saving regularly as well as saving for retirement. My findings show that households with higher levels of financial literacy will tend to have a higher likelihood to save on a regular basis and subsequently save for retirement. I find that women, the...

May 10, 2019
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December 2018

16Dec

Informing Retirement Savings Decisions: A Field Experiment on Supplemental Plans

By Robert L. Clark (North Carolina State University - Poole College of Management), Robert G. Hammond (North Carolina State University), Melinda Sandler Morrill (North Carolina State University - Department of Economics), Christelle Khalaf (North Carolina State University) Although supplemental saving plans can be an important part of an individual's financial security in retirement, contribution rates remain low, particularly among those with lower salaries and less education. We report findings from an intervention that provided information on key aspects of the...

December 16, 2018
Articles, News, Pension design, Savings, Slider, Slider-Left, , , ,
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October 2018

29Oct

How Persistent Low Returns Will Shape Saving and Retirement

By Olivia S Mitchell,‎ Robert Clark,‎ Raimond Maurer Financial market developments over the past decade have undermined what was once thought to be conventional wisdom about saving, investment, and retirement spending. How Persistent Low Returns Will Shape Saving and Retirement explores how the weak capital market performance predicted for the next several years will shape pension saving, investment, and decumulation plans. Academics, policymakers, and industry leaders debate alternative strategies to cope with these challenges globally, as economic growth remains slow...

October 29, 2018
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September 2018

21Sep

Financial Literacy: Liberalism, Decision-Making and Social Welfare

By Gordon L. Clark (Oxford University - Smith School of Enterprise and the Environment) Financial literacy is a program for enhancing individuals’ decision-making and an assumption made about the sovereignty of the individual. In its most optimistic form, financial literacy would empower individuals to achieve their financial goals and objectives. It would do so by providing individuals the concepts for effective decision-making in a world subject to financial risk and uncertainty. The logic underpinning this vision is explained arguing that...

September 21, 2018
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21Sep

Endowment Effects and Usage of Financial Products: Field Evidence from Malawi

By Xavier Giné (World Bank - Development Research Group (DECRG)), Jessica Goldberg (University of Maryland, Department of Economics) When offered a choice between two savings accounts, prior account holders are significantly less likely to switch to a cheaper account, compared with new subjects without a prior account. While 49 percent of account holders retained their original, expensive accounts, none of the new subjects who opened an account chose the expensive one. This finding is consistent with the "endowment effect." Exploiting...

September 21, 2018
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21Sep

Predicting Retirement Savings Using Survey Measures of Exponential-Growth Bias and Present Bias

By Gopi Shah Goda (Stanford University), Matthew Levy (London School of Economics & Political Science (LSE) - Department of Economics), Colleen Flaherty Manchester (University of Minnesota), Aaron Sojourner (University of Minnesota; IZA Institute of Labor Economics), Joshua Tasoff (Claremont Colleges - Claremont Graduate University) In a nationally-representative sample, we predict retirement savings using survey-based elicitations of exponential-growth bias (EGB) and present bias (PB). We find that EGB, the tendency to neglect compounding, and PB, the tendency to value the present...

September 21, 2018
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