Financial Fragility, Financial Resilience, and Pension Distributions

36 Pages Posted: 27 Feb 2024

See all articles by Robert L. Clark

Robert L. Clark

North Carolina State University - Poole College of Management

Olivia S. Mitchell

University of Pennsylvania - The Wharton School, Pension Research Council; University of Pennsylvania - The Wharton School; National Bureau of Economic Research (NBER)

Date Written: January 21, 2024

Abstract

We evaluate Americans’ financial robustness during the Covid-19 pandemic, using measures of financial resilience and financial fragility derived from US surveys of persons age 45-75 from 2020 to 2022. We analyze which factors were associated with resilience and fragility, discuss how these measures changed during the pandemic, and assess whether pre-pandemic resilience led to better outcomes during the period. Results show that stronger resilience was protective in terms of financial fragility, and financial literacy was associated with greater pension knowledge as well as better information about retirement plan distribution options. The more financially resilient were also more likely to select an annuity as a pension payout. Our findings imply that policies and programs enhancing financial resilience could help households better withstand economic shocks and address income needs in times of crisis.

Keywords: Financial resilience, poverty dynamics, aging

JEL Classification: G53, D14, I38

Suggested Citation

Clark, Robert L. and Mitchell, Olivia S., Financial Fragility, Financial Resilience, and Pension Distributions (January 21, 2024). Wharton Pension Research Council Working Paper No. 2024-02, The Wharton School Research Paper, Available at SSRN: https://ssrn.com/abstract=4739090 or http://dx.doi.org/10.2139/ssrn.4739090

Robert L. Clark (Contact Author)

North Carolina State University - Poole College of Management ( email )

Hillsborough Street
Raleigh, NC 27695-8614
United States
919-515-5560 (Phone)
919-515-5564 (Fax)

Olivia S. Mitchell

University of Pennsylvania - The Wharton School, Pension Research Council ( email )

3302 Steinberg Hall-Dietrich Hall
3620 Locust Walk
Philadelphia, PA 19104-6302
United States

University of Pennsylvania - The Wharton School ( email )

Philadelphia, PA 19104-6365
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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