Author: Lina WalkerPublisher:
ISBN:
Category :
Languages : en
Pages : 294
Book Description
Three Essays on Retirement Wealth
Three Essays on Financial Literacy, Financial Self-awareness, and Retirement Well-being
Author: Publisher:
ISBN:
Category :
Languages : en
Pages : 350
Book Description
There has been growing concern about the level of the financial literacy of the U.S. population, in part due to the growing responsibility placed on individuals for retirement planning. While there may be general consensus that increased understanding of financial transaction may be beneficial, it remains unclear what types of financial knowledge are most vital to good financial outcomes, and more importantly, whether greater knowledge makes a difference to later life financial well-being. This dissertation addresses these issues in three essays. In essay 1, I introduce a concept which I term "financial self-awareness," that captures important aspects of financial literacy that are not captured in literacy measures most prevalent in the literature. Financial self-awareness is derived from questions about individuals' knowledge of their own financial assets and is intended to represent a mindset that reflects the degree to which individuals monitor and are alert to their financial situation. In essay 2, inspired by modified human capital theory that incorporates psychological human capital, I examine whether personality traits and psychological orientations explain variations in the level of financial self-awareness. Using data from the Wisconsin Longitudinal Study (WLS), I examine the role of personality traits and psychological characteristics in financial self-awareness, as direct effects or as mediators in the relationship between cognition and financial self-awareness. Results show that financial self-awareness is a distinct attribute, not merely a proxy for personality or cognitive abilities. In essay 3, using this measure of financial self-awareness, I examine its consequences for retirement well-being, as measured by wealth accumulation. I find that for individuals with lower to moderate wealth, greater financial self-awareness, that is having more awareness (knowledge) of financial assets, is associated with holding more wealth. This study contributes to the literature by introducing and validating financial self-awareness as an important and distinct measure from existing financial literacy measures, and documenting for which economic groups financial self-awareness makes a difference and therefore most likely to be in need of and benefit from financial education. Providing better-targeted interventions that specifically promote financial self-awareness would be expected to improve financial well-being in later life.
Three Essays on Early Retirement, Demographic Structure, and International Capital Flow
Author: Xin LiangPublisher:
ISBN:
Category : Electronic dissertations
Languages : en
Pages :
Book Description
My dissertation consists of three chapters, which study the relationship between early retirement, demographic structure, and savings, international capital flows in developing countries, especially in China. The first chapter studies the role of early retirement and pension system as drivers of China's persistent high savings. The main findings are that the early retirement effect contributes to the majority of the growth and fluctuation in the saving rate while both early retirement effect and wealth substitution effect have a positive impact on the saving rate. The second chapter, accounting for the facts that the global current account balance must be equal to zero, re-examines the impact of demographic change on the current account balance. The main finding of this paper is that the young dependency ratio has a robust and significant negative impact on the current account but the old dependency ratio has an ambiguous and insignificant impact on the current account under the general equilibrium condition. The last chapter examines studies the role of early retirement and pension system reform as drivers of China's persistent high savings and current account surplus with the aid of an opened-economy model. The results show that, the dominant early retirement effect coupled with the wealth substitution effect can increase the household's savings. The current account surplus is due to the high savings and the domestic firms have financial borrowing friction to access domestic investment. The earlier and earlier actual retirement age finally results in the growing saving rates and current account surplus under the restriction of domestic investment.
Don't Go Broke in Retirement
Author: Steve VernonPublisher: Rest-Of-Life Communications
ISBN: 9780985384661
Category : Business & Economics
Languages : en
Pages : 184
Book Description
Make Smart Choices with Your Social Security and Savings! Are you thinking about retiring soon, or have you recently retired? Don't Go Broke in Retirement, the latest in a series of acclaimed books by trusted retirement expert Steve Vernon, gets right to the point and shares an easy-to-follow, three-step plan that helps you answer these critical questions: Have you saved enough money to retire? When should you start your Social Security benefits? What's the best way to build lifetime income that's protected from financial crises? What living expenses should you reduce to make retirement more affordable? Based on the "Spend Safely in Retirement Strategy," the plan was developed from new research by the Stanford Center on Longevity and the Society of Actuaries. Learn why this strategy has garnered national attention and discover how the recent financial turmoil successfully stress-tested this plan, proving its effectiveness for managing retirement funds. Don't Go Broke in Retirement provides the information and tools you need to generate the most retirement income from your Social Security benefits and retirement savings, including: A simple, step-by-step checklist to help you put your plans into action Modifications to personalize the strategy for your goals and circumstances Access to bonus chapters to help you apply the strategies outlined in the book, including investing in retirement, navigating tax rules, and finding professional help with retirement funding strategies A list of helpful resources and research to learn more Don't worry about your retirement! Instead, develop solid financial strategies so you can confidently enjoy your retirement years.
Three Essays on the Disposition of Employer-sponsored Retirement Plan Balances
Author: Erik M. ScherpfPublisher:
ISBN:
Category :
Languages : en
Pages :
Book Description
This thesis investigates why, in spite of the high tax and opportunity costs, a substantial fraction of workers withdraw money from their employer-sponsored retirement accounts upon leaving a job. I employ three national surveys--the National Longitudinal Survey of Youth 1979 (NLSY79), the Survey of Consumer Finances (SCF) and the Survey of Income and Program Participation (SIPP)--to evaluate explanations for this behavior. Often attributed to poor decision-making, withdrawals from employer-sponsored plans may in fact serve as an important mechanism for liquidity-constrained workers to smooth consumption in response to income shocks. Results from the NLSY79 suggest that withdrawals do appear to be driven largely by need, as workers who faced jobless spells upon separation as well as those with low holdings of liquid assets, and poor access to consumer credit markets, were significantly more likely to take some money from their retirement plans when leaving an employer. Yet there was little evidence to support the hypothesis that workers who suffered an adverse job separation were more likely to withdraw money from their plans if they were also liquidity constrained. The second chapter estimates the tax sensitivity of withdrawal decisions using estimates of effective federal and state marginal tax rates generated with the NBER Taxsim program. Estimates reveal that, depending on the tax price measure used, a one percent increase in the marginal tax rate increased the probability that workers preserved the tax-deferred status of the money in their retirement plans between 10 and 30 percentage points. State-level penalties for early withdrawals were also found to be an effective policy instrument for deterring cash outs among workers under age 55. In the third chapter, I take advantage of measures of savings goals and habits, as well as more specific information on the use of cash settlements, found in the SCF to further investigate behavioral explanations for disposition of employer-sponsored plans. Workers who reported credit constraints, a short planning horizon, not saving primarily for retirement and a major future expense for which they had not yet begun saving were significantly more likely to take money from their plans.
Does Money Buy Better Health?
Author: Brent Matthew BerryThree Essays in Macroeconomics
Author: Emmanuel FarhiPublisher:
ISBN:
Category :
Languages : en
Pages : 157
Book Description
(cont.) Contrary to common intuition, prior to retirement an investor might find it optimal to increase the proportion of financial wealth held in stocks as she ages, even when she receives a constant income stream and the investment opportunity set is also constant. This is particularly true when the wealth of the investor increases rapidly due to strong stock market performance, as was the case in the late 1990's. We also show that the model can potentially provide a rational explanation for the paradoxical fact that some investors saving for retirement chose to increase their allocation to stocks as the market was booming and reduce it thereafter.
Household Financial Choice
Author: Michael S. FinkePublisher:
ISBN:
Category : Electronic Dissertations
Languages : en
Pages : 110
Book Description
This dissertation examines household characteristics the impact financial decision making. The first essay explores the role of cognitive ability in numeracy, risk tolerance, credit decisions, wealth and retirement savings and asset allocation and finds that cognitive ability is an important predictor of financial decisions. The second essay develops a new instrument to measure time discounting and models asset accumulation and asset allocation and finds that a factor score of intertemporal behaviors is significantly related to both asset accumulation and asset allocation. The third essay documents the decline in basic financial knowledge among households over 60 using a new financial literacy instrument developed to more accurately capture a household's ability to make effective balance sheet, credit, investment, and insurance choices.
Three Essays in Household Finance
Author: Brian K. BaughPublisher:
ISBN:
Category : Home economics
Languages : en
Pages : 142
Book Description
In the third essay, I study the extent to which defined contribution (DC) asset allocation is influenced by plan defaults and whether individuals exercise their option to leave the DC plan. I analyze the investments of 13,500 employees in a state-sponsored retirement plan and find persistent effects of default allocations. Cohorts born in the 1990s hold 16.5% less in money market funds (the historical default allocation) and over 25% more in target date funds (the current default allocation) than those born in the 1980s and earlier. I then analyze a unique feature of the DC plan which enables individuals to transition to a defined benefit (DB) plan (or DB/DC mix) five years after their initial hire date. I find that 22% of individuals exercise this option, 90% of which switch to a more conservative plan. Switching out of DC plans is concentrated in years following the Great Recession and decreases substantially in the post-recession recovery. Individuals invested in the guaranteed return fund are the least likely to exercise the option to switch plans.
Author: Michael M. Perry