Financial literacy and retirees' resource allocation decisions in New Zealand

Jelita Noviarini, Andrew Coleman, Helen Roberts and Rosalind H. Whiting

Pacific-Basin Finance Journal, 2023, vol. 79, issue C

Abstract: We investigate the relationship between financial literacy, debt anxiety, risk tolerance, and subsequent resource allocation decisions for cohorts of retirees. Using a survey and the novel comparative method of Multi-Criteria Decision-Making Analysis we prioritise retirement allocation choices of older New Zealanders. Retirees display high financial literacy and together with debt anxiety this is significantly correlated with resource allocation preferences. Financial literacy reduces debt anxiety in men, increases the risk tolerance of women and is associated with a higher preference for KiwiSaver. Greater debt anxiety is associated with debt repayment, and debt avoidance in old age is critical to long-term wellbeing.

Keywords: Financial literacy; Retirement spending; Personal debt; Risk; KiwiSaver (search for similar items in EconPapers)
JEL-codes: A20 D14 G11 J26 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:pacfin:v:79:y:2023:i:c:s0927538x23000513

DOI: 10.1016/j.pacfin.2023.101985

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