Financial Literacy and Retirement Planning: Evidence from Israel

21 Pages Posted: 27 Dec 2016

See all articles by Adi Meir

Adi Meir

Hebrew University of Jerusalem

Yevgeny Mugerman

Bar Ilan University

Orly Sade

Hebrew University of Jerusalem - Department of Finance

Date Written: October 1, 2016


Increasing life expectancy together with reforms in the retirement savings market and changes in the job market pose significant challenges for Israelis, who today find themselves confronted with the need to carefully plan for future retirement. Financial literacy is critical to retirement planning, particularly in wake of the increasingly wide array of long-term financial products, schemes and services marketed to individual investors. Our research focuses on financial literacy as it relates to financial planning for retirement (“retirement literacy”). It surveys and documents two aspects of financial literacy: financial knowledge and financial decision-making behavior.

The findings indicate that the activities of searching for financial information and monitoring household expenses are positively correlated with retirement literacy, even after controlling for various demographic and behavioral variables. Surprisingly, no significant correlation was found between retirement literacy and financial knowledge or numeracy skills, when controlling for other variables. Financial literacy regarding retirement savings increases with an individual’s tendency to meticulously check bills and periodic account statements, while financial expertise does not necessarily translate into higher levels of retirement literacy.

Suggested Citation

Meir, Adi and Mugerman, Yevgeny and Sade, Orly, Financial Literacy and Retirement Planning: Evidence from Israel (October 1, 2016). Israel Economic Review, Vol. 14, No. 1. Available at SSRN:

Adi Meir (Contact Author)

Hebrew University of Jerusalem ( email )

Mount Scopus
Jerusalem, IL Jerusalem 91905

Yevgeny Mugerman

Bar Ilan University ( email )

Ramat Gan

Orly Sade

Hebrew University of Jerusalem - Department of Finance ( email )

Mount Scopus
Jerusalem, 91905
972 2 588 3227 (Phone)

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