scholarly journals Financial literacy and retirement planning in Germany

2011 ◽  
Vol 10 (4) ◽  
pp. 565-584 ◽  
Author(s):  
TABEA BUCHER-KOENEN ◽  
ANNAMARIA LUSARDI
Keyword(s):  
Instrumental Variables ◽  
Low Income ◽  
Financial Literacy ◽  
Positive Impact ◽  
East Germany ◽  
Retirement Planning ◽  
Gender Disparity ◽  
Financial Knowledge ◽  
Low Education ◽  
Using Data

AbstractWe examine financial literacy in Germany using data from the SAVE survey. We find that knowledge of basic financial concepts is lacking among women, the less educated, and those living in East Germany. In particular, those with low education and low income in East Germany have low financial literacy compared to their West German counterparts. Interestingly, there is no gender disparity in financial knowledge in the East. In order to investigate the nexus of causality between financial literacy and retirement planning, we develop an instrumental variables strategy by making use of regional variation in the financial knowledge of peers. We find a positive impact of financial knowledge on retirement planning.

Living beyond one’s means: evidence from Malaysia

2015 ◽  
Vol 43 (1) ◽  
pp. 2-18 ◽  
Author(s):  
Yiing Jia Loke
Keyword(s):  
Low Income ◽  
Financial Literacy ◽  
Financial Distress ◽  
Financial Management ◽  
Practical Knowledge ◽  
Financial Education ◽  
Financial Knowledge ◽  
Content Type ◽  
Explanatory Variables ◽  
Financial Behaviour

Purpose – The purpose of the paper is to identify the determinants of the probability of living beyond one’s means. The paper also explores the coping mechanisms of those financially distressed as well as the debt taking behaviour of consumers. Design/methodology/approach – The study uses data obtained from the OECD International Network on Financial Education pilot study on Measuring Financial Literacy in 2010 for the case of Malaysia. A logistic regression model is used to identify the main determinants of the probability that a consumer will live beyond his/her means. The analysis is carried out by using a set of socio-economic factors and the individual’s financial behaviour and attitudinal characteristics as explanatory variables. Findings – The findings indicate that low income and seasonal income earners are more vulnerable to financial distress. Furthermore, having a higher education, higher financial knowledge and prudent financial behaviour and attitude do not necessarily translate into better financial management. Family and friends provide the main source of financial assistance in times of need. Research limitations/implications – The assessment of financial knowledge should go beyond individual’s knowledge on financial concepts and theories. Practical knowledge on financial and cash flow management should be assessed. Practical implications – The study reiterates the importance of financial education. It is imperative to include financial education as part of the schools’ curriculum and also to be incorporated as part of the Continuous Professional Development modules for working adults. Originality/value – The study is based on the first nationwide study of consumer finances in Malaysia. It contributes to the literature by integrating financial behaviour and attitudinal factors into the analysis of the ability of individuals to live within their means. The findings also show the limitations of the existing self-assessment of financial behaviour and attitude and the assessment of financial knowledge.

Financial literacy and retirement planning in Sweden

2011 ◽  
Vol 10 (4) ◽  
pp. 585-598 ◽  
Author(s):  
JOHAN ALMENBERG ◽  
JENNY SÄVE-SÖDERBERGH
Keyword(s):  
Educational Attainment ◽  
Low Income ◽  
Financial Literacy ◽  
Pension System ◽  
Retirement Planning ◽  
Strongly Correlated ◽  
Consumer Survey ◽  
Swedish Population ◽  
Risk Diversification

AbstractWe use data from the Swedish Financial Supervisory 2010 consumer survey to look at levels of financial literacy and retirement planning in the Swedish population. The results indicate that many adults have low financial literacy. In general, financial literacy levels are lower among the young, the old, women and those with low income or low educational attainment. People who report having tried to plan for retirement have higher levels of financial literacy. In particular, an understanding of risk diversification is strongly correlated with planning for retirement. We relate our findings to features of the Swedish pension system.

Orthopaedic Surgery Resident Financial Literacy: An Assessment of Knowledge in Debt, Investment, and Retirement Savings

2019 ◽  
Vol 85 (4) ◽  
pp. 353-358 ◽  
Author(s):  
John D. Jennings ◽  
Courtney Quinn ◽  
Justin A. Ly ◽  
Saqib Rehman
Keyword(s):  
United States ◽  
Orthopedic Surgery ◽  
Financial Literacy ◽  
Financial Education ◽  
Retirement Planning ◽  
The United States ◽  
Financial Knowledge ◽  
Retirement Savings ◽  
Willingness To Participate ◽  
Formal Curriculum

Most orthopedic residents carry significant debt and may enter their practice with little knowledge of business management, minimal retirement savings, and overall poor financial literacy. This study aimed to gauge financial literacy, debt, and retirement planning in United States orthopedic surgery residents. Willingness to participate in formalized financial education was also assessed. Eighty-five allopathic orthopedic surgery residents in the United States completed a 14-question anonymous online survey in 2016. The survey assessed demographic data, self-assessed financial knowledge, amount of credit card debt and loans, preparation for retirement, and willingness to participate in formal didactic education on these topics. Most respondents derive their financial knowledge from personal research (51%), whereas only 4 per cent have a formal curriculum. Despite most respondents reporting more than $200,000 in outstanding loans, only 31 per cent create and stick to a budget. Few programs offer retirement advice, and 48 per cent of respondents save $0 toward retirement. Eighty-five per cent of residents expressed interest in learning about personal investment, savings, and retirement planning. Orthopedic surgery residents carry significant debt and do not achieve their high-income potential until disproportionately later in life. Only 4 per cent of residents have formal training in investing, personal finance, or retirement despite a majority who desire such a curriculum. In fact, almost 75 per cent of those surveyed felt less prepared for retirement than their peers outside of medical training. This study suggests a role for formal financial education in the orthopedic curriculum to prepare residents for retirement, improve financial literacy, and enhance debt management.

scholarly journals How Ordinary Consumers Make Complex Economic Decisions: Financial Literacy and Retirement Readiness

2017 ◽  
Vol 07 (03) ◽  
pp. 1750008 ◽  
Author(s):  
Annamaria Lusardi ◽  
Olivia S. Mitchell
Keyword(s):  
Decision Making ◽  
Financial Literacy ◽  
Retirement Planning ◽  
Financial Knowledge ◽  
Objective Measures ◽  
Causal Relationships ◽  
Economic Decision ◽  
American Life ◽  
Economic Decisions ◽  
Economic Decision Making

This paper explores who is financially literate, whether people accurately perceive their own economic decision-making skills, and where these skills come from. Self-assessed and objective measures of financial literacy can be linked to consumers’ efforts to plan for retirement in the American Life Panel, and causal relationships with retirement planning examined by exploiting information about respondent financial knowledge acquired in school. Results show that those with more advanced financial knowledge are those more likely to be retirement-ready.

scholarly journals The impact of participation in employment-based retirement savings plans on material hardship

2015 ◽  
Vol 15 (4) ◽  
pp. 407-428
Author(s):  
BRADLEY T. HEIM ◽  
SHANTHI P. RAMNATH
Keyword(s):  
Income Distribution ◽  
Low Income ◽  
Positive Impact ◽  
Retirement Savings ◽  
Program Participation ◽  
Material Hardship ◽  
Short Term ◽  
Financial Difficulties ◽  
Using Data ◽  
The Impact

AbstractTo contribute to a retirement plan (barring an increase in income), an individual must either reduce consumption or increase debt. Using data from the 2004 wave of the Survey of Income and Program Participation, we examine the extent to which contributing to 401(k)-type accounts leads to an increase in short-term financial difficulties, particularly among low-income individuals. After instrumenting for plan take-up, we find that contributing to a 401(k) plan appears to have a small positive impact on the presence of any material hardship and debt holding among the lowest income quintiles, though that effect diminishes further up the income distribution.

Financial Literacy and Retirement Planning in Sakon Nakhon Province, Nakhon Phanom Province and Mukdahan Province

2020 ◽  
Vol 11 (1) ◽  
pp. 18-18
Author(s):  
Tatiyaporn SIRISAKDAKUL ◽  
Butsakorn KHORNJAMNONG
Keyword(s):  
Financial Literacy ◽  
Financial Management ◽  
Retirement Planning ◽  
Financial Knowledge ◽  
Money Management ◽  
Fundamental Factor ◽  
Goods And Services ◽  
Working Age ◽  
Financial Decision ◽  
Thai People

Financial knowledge or financial literacy is a crucial and fundamental factor for people's living so that they are able to survive with quality but without debts. As money is used as a medium for exchange of either goods or services, people in need of carrying out any activities involving goods and services necessarily depend on money. Unfortunately, Thailand does not emphasize on providing financial knowledge to people, namely understanding financial disciplines, plans and effective money management, for good financial decision and stability. According to a survey of the Bank of Thailand (2019), many Thai people are in debts quite early and tend to be unable to pay back for their debts punctually. This is a point that reflects their lack of skills on financial management or few financial knowledges, thus resulting in a lot of bad debts among those who lack such knowledge. Keywords: Financial literacy,Retirement Planning,Working-age people

Assessing a Community-Based Financial Literacy Program: A Case Study in California’s Silicon Valley

2018 ◽  
Vol 29 (1) ◽  
pp. 142-153 ◽  
Author(s):  
Xiaoyan Xu
Keyword(s):  
Low Income ◽  
Financial Literacy ◽  
Positive Impact ◽  
Silicon Valley ◽  
Financial Education ◽  
Well Being ◽  
Literacy Program ◽  
Knowledge Gain ◽  
Community Based ◽  
Behavioral Tendencies

This study presents a community-based financial literacy program offered to low-income families in the heart of Silicon Valley. Leveraging local financial institutions and organizations, it provided financial education and encouraged habit formation, hoping for lasting outcomes toward financial well-being. Program impact was assessed in the areas of financial knowledge gain, behavioral tendencies in financial decision-making, and self-reported personal finances. Participants showed significant improvement in key knowledge areas, with positive impact observed in behavioral tendencies such as financial goal setting. Improvements in financial outcomes were not significant. The results of this intervention illustrate that maintaining long-term impact and applying sophisticated evaluation methods present key challenges for community-based efforts focused on financial education.

Financial literacy and retirement preparation in the Netherlands

2011 ◽  
Vol 10 (4) ◽  
pp. 527-545 ◽  
Author(s):  
ROB ALESSIE ◽  
MAARTEN VAN ROOIJ ◽  
ANNAMARIA LUSARDI
Keyword(s):  
Financial Crisis ◽  
The Netherlands ◽  
Financial Literacy ◽  
Causal Effect ◽  
Retirement Planning ◽  
Financial Knowledge ◽  
Retirement Preparation ◽  
Financial Conditions ◽  
Before And After ◽  
New Evidence

AbstractWe present new evidence on financial literacy and retirement preparation in the Netherlands based on two surveys conducted before and after the onset of the financial crisis. We document that while financial knowledge did not increase from 2005 to 2010, in 2010 significantly more individuals report having thought about their retirement. Using information on financial conditions and financial knowledge of relatives, we find a positive causal effect of financial literacy on retirement preparation. Employing the panel feature of our dataset, we show that the effect of financial knowledge on retirement planning is bound to be positive.

Financial literacy and retirement planning in Ghana

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Emmanuel Sarpong-Kumankoma
Keyword(s):  
Low Income ◽  
Financial Literacy ◽  
Retirement Planning ◽  
Financial Behavior ◽  
Vulnerable Groups ◽  
Primary Data ◽  
Formal Sector ◽  
Content Type ◽  
The Impact ◽  
The Empirical Analysis

PurposeThis paper aims to investigate the impact of financial literacy on savings and retirement planning in Ghana.Design/methodology/approachThe study uses primary data collected from a sample of formal sector workers and probit models, to assess how financial literacy affects retirement planning.FindingsThe empirical analysis of this study shows that most individuals lack knowledge of basic concepts of finance. This study finds that only about 27% of respondents were able to correctly answer three simple questions on inflation, interest compounding and risk diversification. Generally, the young, the old, women, low-income earners and the less educated perform worst on financial literacy measures. Also, financial literacy has a positive significant impact on the probability of saving for retirement.Practical implicationsThe low level of financial literacy observed should be of concern to policymakers. Evidently, concrete measures are required to strengthen the knowledge of particularly those in the vulnerable groups such as the young, the old, women, low-income earners and the less educated, in order to enable them to prepare adequately for retirement.Originality/valueThe study contributes to the scant financial literacy and financial behavior literature in developing countries such as Ghana.

Receipt, spending, and clinical correlates of economic impact payments among middle and low-income U.S. adults

2020 ◽  
Author(s):  
Jack Tsai ◽  
Minda Huang ◽  
Eric Elbogen
Keyword(s):  
Mental Health ◽  
Economic Impact ◽  
Low Income ◽  
Financial Literacy ◽  
Mental Health Problems ◽  
Positive Impact ◽  
Living Situation ◽  
Middle Income ◽  
Management Interventions ◽  
Low And Middle Income

This study examined characteristics and planned expenses of U.S. adults who received the economic impact payment (EIP) during the coronavirus disease 2019 (COVID-19) pandemic. Using a nationally representative sample of 6,607 low and middle-income U.S. adults, this study examined the proportion and correlates of EIP receipt among eligible adults; and associations between planned expenses using the EIP, problems paying expenses, and clinical characteristics. In the total sample, 79% reported they received the EIP and 82% of recipients reported the EIP had a positive impact on their life. Being a veteran (OR= 2.59), married (OR= 1.82), with a history of schizophrenia-spectrum disorder (OR= 1.74) or posttraumatic stress disorder (OR= 1.51), and screening negative for recent suicidal ideation (OR= 0.49) were associated with EIP receipt. Planned expenses using the EIP for savings, paying debt, and rent accounted for 63% of the total amount. Greater planned expenses on substance use or gambling were correlated with lower rated impact of the EIP on life. Additionally, EIP receipt was associated with fewer problems paying daily expenses, but participants who screened positive for mental health or alcohol use problems were more likely to report problems paying daily expenses in the past month. Together, these findings suggest unconditional cash transfers, like the EIP, are important for low and middle-income populations to sustain their living situation. The management of funds are important to consider, especially among those experiencing mental health problems, and may represent opportunities for financial literacy and money management interventions.

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