Three articles on financial planning horizon

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This dissertation consists of three distinct behavioral finance studies woven together by the same topic thread – financial planning horizon. The first study investigates the behavioral and non-behavioral factors which affect the older (age 50 or above) American adults’ estate planning decisions. The results in this study indicate that older American adults who have relatively longer financial planning horizons are more likely to have a valid will or trust, controlling for demographic, wealth, health, retirement, and education factors. People who demonstrate high future-discounting may tend to procrastinate will and trust adoption despite the need to do so. The insight gained can help financial advisers and counselors to encourage this important, and increasingly rare, financial planning activity.

The second article studies the determinants and significance of financial planning horizon changes both cross-sectionally and longitudinally. The analysis in this article reveals that older American adults' financial planning horizons are strongly determined by their self-perceived life expectancy. Over time, the changes in self-perceived life expectancy, marital and retirement status, health conditions, and wealth level will cause individuals to shift their financial planning horizons. The insight gained in this study helps financial planners to better understand the factors driving the changes of their clients' financial planning horizons and how to encourage them to expand their planning horizons.

The third article explores the factors associated with charitable giving both cross-sectionally and longitudinally with a focus on financial planning horizon. This paper concludes that American adults who have longer financial planning horizons are more likely to make charitable donations compared to those whose planning horizon is short. Among donors, major gifts are associated with long-term financial planning horizon, wealth, religious activity frequency, volunteer experience, and education. The findings of this paper may help charitable organizations and financial planners to identify potential donors, especially the donors who have the potential to donate large gifts in the long term. It also adds to the literature of studying the benefit and the promoting of longer-term financial planning horizons.

Behavior finance, Financial planning horizon, Estate planning, Charitable planning