Rational and behavioural predictors of pre-retirement cash-outs

Michelle Reyers, Cornelis Hendrik van Schalkwyk and Daniël Gerhardus Gouws

Journal of Economic Psychology, 2015, vol. 47, issue C, 23-33

Abstract: Given the worldwide concern that individuals are not saving sufficiently for retirement, many governments are taking action to try and rectify this tendency. A key focus area is implementing policies to dissuade individuals from accessing accumulated retirement funds when changing jobs. While traditional economic theories assume that individuals act rationally and make optimal decisions without outside intervention, current policy interventions support behavioural theories of decision-making where sub-optimal choices occur due to limitations in human decision-making. Therefore, interventions are based on the assumption that individuals act irrationally. Despite these interventions, many individuals still access their funds suggesting that current interventions may not be sufficiently aligned with the factors influencing decision making in this environment.

Keywords: Pre-retirement cash outs; Life-cycle hypothesis; Behavioural life-cycle hypothesis; Bounded willpower; Bounded rationality (search for similar items in EconPapers)
JEL-codes: D14 D91 G02 (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:joepsy:v:47:y:2015:i:c:p:23-33

DOI: 10.1016/j.joep.2015.01.005

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