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1 – 10 of over 13000Joe James, W. Hadley Leavell and Balasundram Maniam
Reports that few Americans plan financially for their retirement and outlines the possible strategies for doing so, referring to relevant research, e.g. company sponsored pension…
Abstract
Reports that few Americans plan financially for their retirement and outlines the possible strategies for doing so, referring to relevant research, e.g. company sponsored pension plans, individual retirement accounts and dependence on social security. Surveys students before and after financial planning instruction to identify any attitude changes. Finds that many had no idea of how to calculate the funds needed to meet their expectations initially, but that after their finance course they became more realistic about their requirements. Concludes that more training in retirement planning is needed for the general public, urges workers, employers and acacdemics to respond to calls for further research.
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Given the ongoing attention surrounding public sector defined benefit pensions, the participating plan sponsors such as local units of government may be tempted to reduce their…
Abstract
Given the ongoing attention surrounding public sector defined benefit pensions, the participating plan sponsors such as local units of government may be tempted to reduce their future pension liabilities, possibly at the expense of their former employees. Alternatively, public sector employees may act to withdraw their pension contributions if they have concerns related to the sustainability of their employer's pension plan. Nonvested, terminated employees have the option of leaving their contributions on account or taking them as a distribution in the form of a rollover to a qualifying retirement account, or a cash-out. Because a cash distribution carries with it the potential for retirement savings ‘leakage,’ it continues to be of public concern.
This study contributes to the literature by examining determinants of the distribution decisions of terminated employees and is first to specifically explore the association of pension funding levels as a determinant of such decision. Decisions of 46,608 employees who separated employment between 2010 and 2013 were examined. The results suggest that a decrease in the employer's pension funding is associated with increased probability that the terminated employee will take a refund of their contributions. Additionally, the data reveal that 88% of the terminating employees who took a refund requested to receive it in the form of a cash-out, totaling about $38 million of cash distributions. Lastly, about 1,000 of those employees each cashed out more than $8,000, thus suggesting the pension leakage problem warrants further research and perhaps policy changes.
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Dirk Hofäcker, Simone Braun and Matt Flynn
This chapter explores whether and how does the interplay of institutional context and management interventions lead older workers to delay retirement in Germany, the United…
Abstract
This chapter explores whether and how does the interplay of institutional context and management interventions lead older workers to delay retirement in Germany, the United Kingdom and Hong Kong. The most important factors that influence retirement plans are placed on three analytical levels: the individual, the workplace and the institutional levels. It explores the importance of these factors and their cross-national variation in three different countries, namely Germany, the United Kingdom and Hong Kong. Using three national datasets we explore the relationship between the aforementioned factors via descriptive statistics and linear regression models. Institutional regulations seem to matter for retirement plans. But within countries, plans show varying patterns across social groups (lower educated, financially disadvantaged). The comparative design does not allow analysing specific institutional features directly, but findings are indicative for the fact that individuals take institutional frameworks into account when planning retirement transitions. The findings call for regime-specific solutions and future policies, for example, age-friendly workplace conditions and opportunities for requalification and mobility in Germany, rising retirement ages and greater financial security via more generous universal pension rights in Hong Kong and the United Kingdom.
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This study introduces the concept of financial advice deserts (FADs), including financial advice received from personal financial advisors (PFAs) and Certified Financial Plannersâ„…
Abstract
Purpose
This study introduces the concept of financial advice deserts (FADs), including financial advice received from personal financial advisors (PFAs) and Certified Financial Plannersâ„¢ (CFP professionals) and investigates the association between living in these FAD states and the retirement planning activities of individuals.
Design/methodology/approach
This study uses merged data gathered from multiple sources including (1) available state-level information on CFP professionals from the CFP board website, (2) state-level information on PFAs from the US Bureau of Labor Statistics and (3) individual levels of retirement planning behavior and other personal characteristics from the 2018 FINRA National Financial Capability Study. Using web data extraction tools and logistic regression analyses, this study examines the association between a series of individual retirement planning activities and living in the FAD states.
Findings
The study found that living in the FAD states was negatively associated with both having retirement accounts and contributing regularly to retirement accounts. Overall, the findings of this study underscore the need for providing greater access to financial advice and improving financial literacy among financially marginalized populations who are residing in FAD states in the United States of America.
Originality/value
This study makes unique contributions to the literature by raising the issue of geographic inequality in terms of access to financial advice and introducing the innovative notion of FADs. The findings provide fresh insights into the understanding of retirement planning and preparedness from the perspective of state-level inequality of financial advice through PFAs and CFP professionals, thereby expanding the previous knowledge that emphasizes only individual- and household-level differences. Significant implications for public policies and practitioners are also discussed.
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Krishna Murari, Shalini Shukla and Bhupendra Adhikari
The aim of this study is to understand the effects of psychological social and financial perceptions of post-retirement life and demographic characteristics on retirement planning…
Abstract
Purpose
The aim of this study is to understand the effects of psychological social and financial perceptions of post-retirement life and demographic characteristics on retirement planning behaviour (RPB) of the employees from different occupational sectors.
Design/methodology/approach
The primary data from 400 employees in central government, state government and private sector is collected through a structured questionnaire. The questionnaire comprised of 43 items to measure social and financial perceptions and RPB along with demographic information. An exploratory factor analysis (EFA) and multiple linear regression (MLR) analysis are performed to find the significant variables of social and financial perceptions influencing the RPB.
Findings
The results of exploratory factor analysis revealed three principle components of social perceptions, four of financial perceptions and three of RPB. The role clarity, involvement, obligations, uncertainty and preparations have significant impact on RPB. This study found a moderate positive correlation between RPB and extracted factors of social and financial perceptions. The study confirms the significant effect of demographic variables such as age, marital status, occupational sector, income and education levels on RPB.
Originality/value
The study has number of implications for government and private sector organisations involved in offering the retirement planning solutions as well as to the employees. The stakeholders may take a note of the role of psychological social (role clarity and social involvement) and financial (financial obligations, uncertainty and preparation for post-retirement life) perceptions that influence RPB. The study also provides an insight to the policy makers for considering the demographic information such as age, education, marital status and income of the employees while designing/offering the choices of retirement plans to them. Further studies are recommended to validate the findings of this study in terms of testing the effect of psychological social and financial perceptions on retirement planning behaviour of the employees.
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Lucía Rey-Ares, Sara Fernández-López, María Milagros Vivel-Búa and Rubén Lado-Sestayo
This paper aims to investigate whether individuals’ planning horizon influences their decision to save privately for their retirement.
Abstract
Purpose
This paper aims to investigate whether individuals’ planning horizon influences their decision to save privately for their retirement.
Design/methodology/approach
Focussing on Spain, this empirical research uses the fifth wave of the Survey of Health, Ageing and Retirement in Europe (SHARE)[1]. Logit models are estimated considering variables related to demographic characteristics, economic situation, education and cognitive abilities and psychological and social factors.
Findings
The results confirm that the planning horizon significantly influences the decision to save for retirement. Long-term planners are more likely to save for retirement than short-term planners.
Originality/value
Although previous literature has identified the planning horizon as a relevant variable in the decision to save for retirement, few empirical studies have evaluated their impact. This paper shows that it is important to develop habits of financial planning in societies, especially in societies with a prominent orientation towards the present.
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Satish Kumar, Sweta Tomar and Deepak Verma
The purpose of this paper is to examine the status of the research on women’s financial planning for retirement. This paper provides a brief review of the work carried out so far…
Abstract
Purpose
The purpose of this paper is to examine the status of the research on women’s financial planning for retirement. This paper provides a brief review of the work carried out so far along with a conceptual framework of factors influencing women’s retirement financial planning. In addition, it lists significant gaps and recommends avenues for future research.
Design/methodology/approach
The review is based on 151 articles appearing in various peer-reviewed journals published during 1980–2017. The study establishes its prominence by studying the publication activities based on the year of publication and region, citation analysis, research designs, data analysis techniques and findings from the selected articles.
Findings
Most of the literature on women’s financial planning for retirement indicates a lack of financial management amongst women and their susceptibility to poverty in postretirement years. The majority of the research works in this field have taken place in developed economies. Empirical research with regression-based models for analysis is the most popular research design. This review also highlights the significant determinants of women’s retirement financial planning as identified through literature. These include socio-demographic factors, psychological constructs, financial literacy, economic and circumstantial forces.
Originality/value
This paper covers the research works done in this area in the past 38 years. To the best of authors’ knowledge, this is the first attempt to provide a systematic and comprehensive compilation of the knowledge in this subject. It further synthesizes the findings of various studies on factors influencing women’s retirement financial planning and gives recommendations for future studies.
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The purpose of this paper is to analyze financial literacy's effect on retirement planning among young adults in Mexico, with gender as a moderator variable. Planning refers to…
Abstract
Purpose
The purpose of this paper is to analyze financial literacy's effect on retirement planning among young adults in Mexico, with gender as a moderator variable. Planning refers to the actual or intended implementation of several retirement strategies: private pension funds, investing in assets, government subsidies and family assistance.
Design/methodology/approach
The article's methodology is quantitative, empirical and cross-sectional. Ajzen's theory of planned behavior (1991) works as the theoretical framework to examine planning for retirement intentions determined by individuals' financial inclusion, attitudes, knowledge, behavior, occupation and family traits. The methodology follows generalized structural equation models (GSEM) with logistic regression basis, constructed with data from the National Survey on Financial Inclusion 2018.
Findings
Results confirm that the most financially knowledgeable individuals have lesser intentions to pursue passive strategies, while financial behavior and inclusion associate with actively planning. Gender plays a fundamental role in retirement planning too.
Research limitations/implications
Observations for several years are necessary to effectuate longitudinal analysis. Further research should include a more in-depth study of strategy choice triggers and policy impact on retirement planning.
Social implications
Findings can be useful to public and private institutions focused on saving, investment and retirement, especially in economies comparable to Mexico's. Avoiding the higher social costs associated with poor retirement planning depends on timely decision-making.
Originality/value
This study goes beyond the traditional pension fund strategy to analyze other options. It delivers information about young people's long-term financial plans in Mexico concerning financial literacy and gender.
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This paper aims to compare and contrast alternative pension plans in the market place and their status as zakatable wealth or property. These plans differ in terms of who is…
Abstract
Purpose
This paper aims to compare and contrast alternative pension plans in the market place and their status as zakatable wealth or property. These plans differ in terms of who is responsible for providing funds for pension benefit to the retirees upon retirement and who is responsible for bearing investment risk. Whether a pension plan is subject to zakat immediately or upon receipt at retirement depends on immediate accessibility to and ownership of the funds in the account. It makes no difference whether employer and/or the employee is (are) responsible for funding the plan and who bears the investment risk.
Design/methodology/approach
Descriptive and analytical methods were used.
Findings
There is consensus among Muslim jurists and shariah scholars that mandatory retirement plans offered as a part of compensation and benefit package for a job are subject to zakat when money is received upon retirement and non-mandatory plans offered as replacement for or supplement to employer-sponsored plans with voluntary employee participation are subject to zakat in each year of employment.
Originality/value
There is no prior research work in the extant literature examining zakatability of alternative retirement plans offered in the US marketplace. This paper fills this void and provides a comprehensive survey and analysis of all available retirement plans and their treatment with respect to zakat.
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Linda Evelina Larisa, Anastasia Njo and Serli Wijaya
The purpose of this study is to examine the effects of demographical factors (age, education and income); psychological factors which are future time perspective (FTP) and…
Abstract
Purpose
The purpose of this study is to examine the effects of demographical factors (age, education and income); psychological factors which are future time perspective (FTP) and financial risk tolerance (FRT); along with financial literacy on retirement planning among female workers in Indonesia.
Design/methodology/approach
This study applies a quantitative approach, where primary data was acquired through online surveys to 529 workers in various locations in Indonesia. After data cleaning, the final sample size was 304. The PLS-SEM technique was utilised to assess the structural model in the study.
Findings
The results of this study show that income affects an individual's perspective towards the future. Financial literacy is confirmed to have a direct effect on retirement planning activity. Furthermore, financial literacy appears to be a significant mediator between demographical factors and FTP in affecting retirement planning. An individual's acceptance towards risk is also affected by financial literacy.
Practical implications
The general public, especially female workers group who have no retirement funds, need to be educated on financial literacy. The government might need to encourage other parties and work together to financially educate the public, specifically regarding investments for retirement planning.
Originality/value
Most previous studies on retirement planning focused on demographical factors in general, and not specifically on a certain group. Filling the gap of existing studies, this study specifically discusses retirement planning done by female workers in Indonesia. Women's role as a workforce, with their psychological conditions and financial literacy, makes for an interesting topic to be studied further in terms of retirement planning.
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