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Saving for the future: Dynamic effects of time horizon

Rolison, JJ and Hanoch, Y and Wood, S (2017) 'Saving for the future: Dynamic effects of time horizon.' Journal of Behavioral and Experimental Economics, 70. 47 - 54. ISSN 2214-8043

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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.

Item Type: Article
Additional Information: 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.
Uncontrolled Keywords: Saving, Retirement, Financial planning, Time horizon, Financial knowledge
Subjects: B Philosophy. Psychology. Religion > BF Psychology
H Social Sciences > HB Economic Theory
Divisions: Faculty of Science and Health > Psychology, Department of
Depositing User: Elements
Date Deposited: 03 Oct 2017 09:40
Last Modified: 03 Oct 2017 10:15
URI: http://repository.essex.ac.uk/id/eprint/20414

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