Financial Literacy, Financial Judgement, and Retirement Self-Efficacy of Older Trustees of Self-Managed Superannuation Funds

Posted: 18 Sep 2015

See all articles by Joanne Earl

Joanne Earl

University of New South Wales (UNSW) - School of Psychology

Paul Gerrans

The University of Western Australia - UWA Business School

Anthony Asher

University of New South Wales (UNSW) - School of Actuarial Studies

Julia Woodside

University of New South Wales (UNSW) - Australian School of Business, School of Accounting

Date Written: August 1, 2015

Abstract

We investigate relationships between retirement self-efficacy, financial literacy and financial judgement across a sample of older trustees of self-managed superannuation funds (SMSFs). Aside from demographic factors, we explore self-rated dementia behaviours, general mental ability, mastery and risk tolerance. An increasing number of older people are controlling significant assets, particularly those who elect to become self-managed superannuation fund trustees. The ageing population, including self-managed superannuation fund trustees, is susceptible to cognitive decline with advancing age. We find that cognitive ability and self-rated behavioural dementia symptoms both relate to financial literacy. Variance in retirement self-efficacy was explained by age, cognitive ability, financial literacy, mastery and self-rated behavioural dementia symptoms. Those reporting dementia symptoms appear more vulnerable to making poor financial judgements. Findings have important implications for financial literacy interventions and the monitoring of on-going cognitive decline.

Keywords: Ageing, cognitive ability, dementia, financial decision-making, financial literacy, retirement savings

Suggested Citation

Earl, Joanne and Gerrans, Paul and Asher, Anthony and Woodside, Julia, Financial Literacy, Financial Judgement, and Retirement Self-Efficacy of Older Trustees of Self-Managed Superannuation Funds (August 1, 2015). Australian Journal of Management, Vol. 40, No. 3, 2015. Available at SSRN: https://ssrn.com/abstract=2661568

Joanne Earl (Contact Author)

University of New South Wales (UNSW) - School of Psychology ( email )

Sydney, NSW 2052
Australia

HOME PAGE: http://www.psy.unsw.edu.au/contacts-people/academic-staff/dr-joanne-jo-earl

Paul Gerrans

The University of Western Australia - UWA Business School ( email )

Crawley, Western Australia 6009
Australia
61 8 64882910 (Phone)

Anthony Asher

University of New South Wales (UNSW) - School of Actuarial Studies ( email )

Sydney, NSW 2052
Australia
612 9385 7619 (Phone)

HOME PAGE: http://www.asb.unsw.edu.au/schools/Pages/AnthonyAsher.aspx

Julia Woodside

University of New South Wales (UNSW) - Australian School of Business, School of Accounting ( email )

Sydney, NSW 2052
Australia

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