An empirical study on how financial literacy contributes to preparation for retirement

Tsung-ming Yeh

Journal of Pension Economics and Finance, 2022, vol. 21, issue 2, 237-259

Abstract: This study provides empirical evidence on the mechanisms through which financial literacy may be associated with saving for retirement, in the three phases of the decision-making process – information perception, information search and evaluation, and decision-making and implementation. The results indicate that financial literacy has significantly positive effects on one's awareness of post-retirement financial needs, comparing alternatives when purchasing financial products, displaying fewer present-time bias, and planning for and setting aside funds for retirement. Financial literacy not only directly contributes to planning for the future, but also indirectly via a reduction in behavioral biases.

Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:cup:jpenef:v:21:y:2022:i:2:p:237-259_5

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