Retirement Income and Financial Market Participation in New Zealand

Xiaobo Xu, Martin Young, Liping Zou () and Jiali Fang
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Xiaobo Xu: School of Economics and Management (School of Tourism), Dalian University, Dalian 116000, China
Martin Young: School of Economics and Finance, Massey University, Palmerston North 4442, New Zealand
Liping Zou: School of Economics and Finance, Massey University, Auckland 0745, New Zealand
Jiali Fang: School of Economics and Finance, Massey University, Auckland 0745, New Zealand

IJFS, 2023, vol. 11, issue 1, 1-23

Abstract: Using New Zealand Household Economic Survey (HES) 2018 data, we examine the impact of direct financial market participation post-retirement on retirement income in New Zealand. Our results demonstrate the importance of post-retirement financial market participation in the enhancement of retirees’ financial well-being. We conclude that retirees who participate in the financial market enjoy a 78% increase in overall annuitised net wealth; further analysis also reveals a substantial 154% increase if government pensions are excluded from calculations of annuitised net wealth. Moreover, these retiree participants also show higher probabilities of financial-situation satisfaction. These results highlight the significant contribution to retirement income of direct financial market participation. Our paper sheds extra light on issues related to retirement financial well-being and has important implications for policy makers in New Zealand.

Keywords: financial market participation; New Zealand retirement income; annuitised net wealth; financial-situation satisfaction; life satisfaction (search for similar items in EconPapers)
JEL-codes: F2 F3 F41 F42 G1 G2 G3 (search for similar items in EconPapers)
Date: 2023
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