What Triggers People to Save for Retirement?

53 Pages Posted: 24 Feb 2016

See all articles by Paul Brockman

Paul Brockman

Lehigh University - College of Business

David Michayluk

University of Technology Sydney (UTS) - School of Finance and Economics; Financial Research Network (FIRN); Centre for International Finance and Regulation (CIFR)

Date Written: February 22, 2016

Abstract

We investigate retirement saving decisions through interviews and a broad survey in four countries that investigates what influences changes in savings behaviour. We identify a number of previously unidentified factors that are associated with increased savings. We find that approximately 40% of the respondents in our survey would increase their retirement savings when they receive a raise or they pay off all their debts. We propose these positive triggers be enhanced through employer offered savings matching or other incentives at the time of a raise and financial institution financial planning and product offering when there is an increase in income or when a loan or credit cards are paid off. We also identify negative triggers that may be used to trigger additional savings although we recommend this approach be used with caution. For a subset of the population, fear is a factor that can lead to an increase in savings after observing hardship stories or other events. The difficulty with negative triggers is that the increase to financial health through additional savings may do more harm than good if the increase in fear causes other problems related to physical or emotional health. We suggest focusing on positive triggers.

Keywords: Retirement, retirement drivers, retirement savings

JEL Classification: D14, D91, G11

Suggested Citation

Brockman, Paul and Michayluk, David, What Triggers People to Save for Retirement? (February 22, 2016). CIFR Paper No. 092/2016. Available at SSRN: https://ssrn.com/abstract=2736693 or http://dx.doi.org/10.2139/ssrn.2736693

Paul Brockman

Lehigh University - College of Business ( email )

Bethlehem, PA 18015
United States

David Michayluk (Contact Author)

University of Technology Sydney (UTS) - School of Finance and Economics ( email )

Finance Discipline Group
UTS Business
Sydney, NSW 2007
Australia

Financial Research Network (FIRN)

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

HOME PAGE: http://www.firn.org.au

Centre for International Finance and Regulation (CIFR) ( email )

Level 7, UNSW CBD Campus
1 O'Connell Street
Sydney, NSW 2000
Australia

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