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Financial planning for retirement: the role of income

Milagros Vivel-Búa (Faculty of Economics, Universidade de Santiago de Compostela, Santiago de Compostela, Spain)
Lucía Rey-Ares (Universidade de A Coruña, Ferrol, Spain)
Rubén Lado-Sestayo (Universidade de A Coruña, A Coruña, Spain)
Sara Fernández-López (Universidade de Santiago de Compostela, Santiago de Compostela, Spain)

International Journal of Bank Marketing

ISSN: 0265-2323

Article publication date: 12 April 2019

Issue publication date: 15 August 2019




The purpose of this paper is to study the driving forces of both the decision to participate in individual pension plans and the amount of money allocated to such plans. Moreover, this paper evaluates the potential role that income plays, which has not previously been considered in depth in the financial literature.


Based on a sample of the Spanish population over the period 2008–2015, this paper estimates probit and tobit models, using 165,791 observations. The driving forces of private retirement savings comprise demographic, financial and socio-economic characteristics.


This paper confirms the impact of socio-demographic and economic variables on participation and monetary contributions to pension plans. It also confirms that income plays a non-negligible role. Moreover, empirical evidence reveals that the effect of gender is related to the income stratum to which the individual belongs.


Retirement planning plays a key role in retirees’ future income and several countries have emphasised the importance of private individual savings to supplement the minimum provided by public pension schemes. The previous literature has concluded that those who plan their retirement end their working lives with three times the wealth of non-planners. Consequently, analysis of whether people are saving enough for their retirement can contribute to avoiding future wealth inequalities among retirees. Spain is one of the countries with the greatest inequality in income distribution, so this issue is of even greater interest.



Vivel-Búa, M., Rey-Ares, L., Lado-Sestayo, R. and Fernández-López, S. (2019), "Financial planning for retirement: the role of income", International Journal of Bank Marketing, Vol. 37 No. 6, pp. 1419-1440.



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