Abstract
Why is the public so underprepared for retirement? We studied the saving behavior of a large cross-section of adults to investigate age differences in motivations to save across adulthood. Our investigation revealed that both a future oriented mindset as well as adequate financial knowledge may be necessary for younger adults to engage in saving for their retirement. This finding is consistent with a theoretical account in which younger adults who have long time horizons prioritize preparatory goals and knowledge seeking. As time horizons shorten, motivations to realize goals replace motivations to gather knowledge. Accordingly, future oriented attitudes were more directly associated with saving with advancing age, such that future oriented adults who were approaching retirement saved regardless of their level of financial knowledge. Our findings reveal a dynamic character of saving tendencies across adulthood and imply age differences in the psychological factors that motivate saving behavior.
DOI
10.1016/j.socec.2017.07.006
Publication Date
2017-08-04
Publication Title
Journal of Behavioral and Experimental Economics
Volume
70
Publisher
Elsevier
ISSN
2214-8043
Embargo Period
2024-11-22
First Page
47
Last Page
54
Recommended Citation
Rolison, J., Hanoch, Y., & Wood, S. (2017) 'Saving for the future: Dynamic effects of time horizon', Journal of Behavioral and Experimental Economics, 70, pp. 47-54. Elsevier: Available at: https://doi.org/10.1016/j.socec.2017.07.006
Comments
publisher: Elsevier articletitle: Saving for the future: Dynamic effects of time horizon journaltitle: Journal of Behavioral and Experimental Economics articlelink: http://dx.doi.org/10.1016/j.socec.2017.07.006 content_type: article copyright: © 2017 Elsevier Inc. All rights reserved.