Perceptions of Retirement Savings Relative to Peers

Abstract

A BSTR ACTDo individuals' perceptions of how much others save for retirement influence their own long-range financial saving decisions? In this study, social comparison theory was used as a theoretical touchstone for understanding the impact of interpersonal perceptions on saving behavior. Respondents (N = 224) reported not only the amount they had saved for retirement during the previous year, but they also reported perceptions of the magnitude of their savings relative to peers and completed 6 psychological scales related to retirement planning. A 2-stage ordinary least squares (OLS) regression approach was used to examine: (a) the extent to which nine demographic indicators were predictive of individuals' retirement savings practices, and (b) whether unexplained savings from the initial regression model could be hierarchically predicted using the 6 psychological scales and perceptions of one's savings relative to peers. The findings suggest that social comparisons do account for savings practices over and above demographic and psychological indicators. Results are discussed in terms of how individuals' implicit social comparisons might shape not only their perceptions, but also their saving behavior.

Economic Cognitions Among Older Adults: Parental Socialization Predicts Financial Planning for Retirement

“…Fourth, it should not be forgotten that various works indicate that the family is not the only influence in financial decisions, but instead they are also influenced by comparisons with peers (Koposko et al, 2016 ), or by socialization coming from other sources. Accordingly, particularly important is the work of Dávila et al ( 2016 ), which compares peer influence and parental influence in Spanish children, concluding that the former have more impact than the latter on classmates’ materialism.…”

“…In addition, the perception of social norms could affect the tendency to plan and save, as well as the impact of the person’s financial knowledge and skills (Hershey et al, 2013 ). Financial literacy has received the most attention concerning FPR and it has been related to saving for retirement (Hershey et al, 2007 ; Gutierrez and Hershey, 2013 ; Kiso and Hershey, 2016 ; Koposko et al, 2016 ).…”

“…First, it was noted that taking finance courses improved the financial behavior of adults aged between and 25–55 years (Lyons et al, 2006 ). Second, with regard to FPR, various works have found that financial literacy is positively related to saving behavior, to investment performance (Nawaz, 2015 ), and to pension plan participation (Koposko et al, 2016 ). In addition, it was found that people with more financial literacy plan for their retirement to a greater extent (Koposko and Hershey, 2014 ).…”

Desenvolvimento da Escala de Percepção de Futuro da Aposentadoria (EPFA) e Correlatos Psicossociais

“…Desse modo, optar por se aposentar com idade abaixo da exigida para fins burocráticos serviria ao propósito de contribuir para o melhor ajuste psicossocial dos indivíduos e maior dedicação ao momento da aposentadoria (Curl & Ingram, 2013;Koposko, Kiso, Hershey, & Gerrans, 2015).…”

Are “Voluntary” Self-Employed Better Prepared for Retirement Than “Forced” Self-Employed?

“…The last of the four psychological independent variables we will examine as part of this investigation is future time perspective, which is a personality trait dimension that captures the extent to which an individual enjoys thinking about the future, as opposed to the present or past (Hershey & Mowen, 2000;Koposko et al, 2016;Zimbardo & Boyd, 1999). Having a "long" future orientation to time is important in the retirement saving domain because it has been shown to facilitate the formulation of financial goals and the acquisition of financial knowledge (McCullough, 2012).…”