Retirement Preparedness of Married Individuals

Date
2023-08
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Volume Title
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Abstract

CHAPTER 1 ABSTRACT This study uses the 2021 National Financial Capability Study (NFCS) within a sample of 25,785 adults (18+) across the U.S. to investigate the association between retirement planning behavior and financial knowledge with financial satisfaction for married individuals. This study finds that when married individuals actively engage in retirement planning, their probability of reporting a higher level of financial satisfaction increases. The study also finds that higher objective financial knowledge is associated with reporting a lower probability of financial satisfaction, and higher subjective financial knowledge is associated with reporting a higher probability of financial satisfaction among married people. The results provide financial advisors, financial therapists, and marriage counselors insights into the importance of retirement planning behavior and financial knowledge for their married clients. CHAPTER 2 ABSTRACT This study uses the 2021 National Financial Capability Study (NFCS) within a sample of 25,554 adults (18+) across the U.S. to investigate the association between financial knowledge and risk tolerance with retirement planning behavior for married individuals. The Heckman probit regression analysis results find a positive association between married individuals' objective and subjective financial knowledge and retirement planning behavior. A strong positive association is also found between risk tolerance and retirement planning behavior. These findings offer valuable insights for financial professionals, enabling them to develop tailored investment strategies for married clients based on their risk tolerance and financial goals. By aligning investment plans with clients' risk preferences, financial professionals can enhance the likelihood of their clients achieving their retirement objectives. Furthermore, providing financial education can help improve individuals' overall financial literacy and ability to assess and manage risks effectively. CHAPTER 3 ABSTRACT Guided by the Life cycle model of consumption and saving (Modigliani, 1986) and using data from the 2021 National Financial Capability Study (NFCS), the purpose of the study is to investigate the association of positive financial behavior and subjective financial knowledge to married individuals’ IRA ownership. Using a sample of 23,962 adults (18+) across the U.S., the Heckman probit regression analysis results find a positive association between positive financial behavior and married individuals’ IRA ownership. There is no association between subjective financial knowledge and married individuals' IRA ownership. Based on the findings of this study, financial professionals can derive valuable insights into the significance of positive financial behavior in relation to married individuals' IRA ownership. The results highlight the importance of encouraging and promoting positive financial behaviors such as maintaining emergency savings, spending less than income, having no overdraft, paying off credit card balances, and having health insurance. By emphasizing these behaviors, financial professionals can enhance the likelihood that married individuals will actively engage in comprehensive retirement planning and increase their probability of achieving long-term financial security and stability in retirement.


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Keywords
Financial satisfaction, Retirement planning behavior, objective financial knowledge, subjective financial knowledge, Risk tolerance, IRA ownership, positive financial behavior
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