Individual Capability and Effort in Retirement Benefit Choice

Bateman, H; Eckert, C; Iskhakov, F; Louviere, J; Satchell, S; Thorp, S

Individual Capability and Effort in Retirement Benefit Choice

Bateman, H Eckert, C

Iskhakov, F Louviere, J

Satchell, S Thorp, S

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Publication Type:: Journal Article
Citation:: Journal of Risk and Insurance, 2018, 85 (2), pp. 483 - 512
Issue Date:: 2018-06-01

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Field	Value	Language
dc.contributor.author	Bateman, H	en_US
dc.contributor.author	Eckert, C https://orcid.org/0000-0002-8573-6978	en_US
dc.contributor.author	Iskhakov, F	en_US
dc.contributor.author	Louviere, J https://orcid.org/0000-0001-7688-164X	en_US
dc.contributor.author	Satchell, S	en_US
dc.contributor.author	Thorp, S https://orcid.org/0000-0003-3462-0876	en_US
dc.date.issued	2018-06-01	en_US
dc.identifier.citation	Journal of Risk and Insurance, 2018, 85 (2), pp. 483 - 512	en_US
dc.identifier.issn	0022-4367	en_US
dc.identifier.uri	http://hdl.handle.net/10453/116106
dc.description.abstract	© 2016 The Journal of Risk and Insurance We investigate the role of individual capability and effort in the management of retirement ruin. In an experimental setting, we analyze how 854 defined contribution (DC) plan members reallocated wealth between a lifetime annuity and a phased withdrawal account when we increased the risk of exhausting the phased withdrawal account before the end of life. We find that more numerate individuals who put effort into understanding product features chose more longevity insurance at higher ruin risks. Financially literate members were more likely to show understanding of the product features, but general financial literacy did not directly improve ruin risk management. Initiatives aiming to help DC members understand income stream products at the time of the decision are warranted.	en_US
dc.relation.ispartof	Journal of Risk and Insurance	en_US
dc.relation.isbasedon	10.1111/jori.12162	en_US
dc.subject.classification	Finance	en_US
dc.title	Individual Capability and Effort in Retirement Benefit Choice	en_US
dc.type	Journal Article
utslib.citation.volume	2	en_US
utslib.citation.volume	85	en_US
utslib.for	1502 Banking, Finance and Investment	en_US
pubs.embargo.period	Not known	en_US
pubs.organisational-group	/University of Technology Sydney
pubs.organisational-group	/University of Technology Sydney/Faculty of Business
pubs.organisational-group	/University of Technology Sydney/Faculty of Business/Marketing Discipline
pubs.organisational-group	/University of Technology Sydney/Strength - CENSOC - Study of Choice
utslib.copyright.status	closed_access
pubs.issue	2	en_US
pubs.publication-status	Published	en_US
pubs.volume	85	en_US

Abstract:

© 2016 The Journal of Risk and Insurance We investigate the role of individual capability and effort in the management of retirement ruin. In an experimental setting, we analyze how 854 defined contribution (DC) plan members reallocated wealth between a lifetime annuity and a phased withdrawal account when we increased the risk of exhausting the phased withdrawal account before the end of life. We find that more numerate individuals who put effort into understanding product features chose more longevity insurance at higher ruin risks. Financially literate members were more likely to show understanding of the product features, but general financial literacy did not directly improve ruin risk management. Initiatives aiming to help DC members understand income stream products at the time of the decision are warranted.

Please use this identifier to cite or link to this item:

http://hdl.handle.net/10453/116106