“Do it myself” or “do it for me”?: focusing on behavioural and needs aspects of investment decision among retirement plan participants

HanNa Lim, Richard Stebbins and Travis Sholin

Applied Economics Letters, 2025, vol. 32, issue 4, 518-522

Abstract: Using primary data from 388 employer-sponsored retirement plan participants, this study examines factors related to the decision between self-directed and pre-determined investment options (i.e. target date funds and risk-based portfolios). Results from binary and multinomial logistic regression analyses showed that those with unusual needs such as an early retirement and longer life expectancy were more likely to choose self-directed investment option over pre-determined investment options. However, those with greater loss aversion were more likely to choose target date funds rather than making active investment decisions. The findings of this study help our understanding of retirement plan participants’ investment portfolio choice and provide policy implications on default investment options in employer-sponsored retirement plans.

Date: 2025
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DOI: 10.1080/13504851.2023.2276069

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