Retirement Income Sources and Subjective Financial Well-Being: A Comparison of Retirees and Non-Retirees

Abstract

This study examined whether retirement income sources matter for the subjective financial well-being of retirees and the subjective retirement savings adequacy of non-retirees. Using nationally representative data from the 2017 Survey of Household Economics and Decisionmaking, the study found that while income from a defined benefit (DB) plan, defined contribution (DC) plan, and an individual retirement account (IRA) were positively related to the subjective financial well-being of retirees, income from employment and family were negatively related to their subjective financial well-being. Also, retirement preparation with a DB, DC, and IRA was positively related to subjective retirement savings adequacy for non-retirees. The moderating role of age in the relationship between the form of retirement savings for non-retirees and their subjective retirement savings adequacy was significant. Because of the growing importance of individual responsibility for retirement planning, the present study adds to the financial planning knowledge of financial practitioners, educators, and researchers.

Determinants of the financial wellbeing of individuals in an emerging economy: an empirical study

“…The outcomes are similar to the outcomes of earlier research, e.g. financial literacy (Prakash et al, 2022), financial risk-tolerance (Castro-Gonzalez et al, 2020), financial socialization (Anthony et al, 2022), financial stress and socio-demographic factors such as age (Hira and Mugenda, 1998;Gutter and Copur, 2011;Michael Collins and Urban, 2020), education (Shim et al, 2009;Sabri et al, 2012), gender (Adam et al, 2017;Choi et al, 2020;Botha et al, 2021;Garc ıa-Mata et al, 2022), occupation, and marital status (Hira and Mugenda, 1998;Garcia-Mata et al, 2022). A financially sound individual boosts financial inclusion, strengthens governance, and assists in sustainable development.…”

“…Numerous studies reveal that socio-demographic factors (gender, age, education and income) significantly influence financial behavior (Joo and Grable, 2004). Some studies find that age and financial wellbeing have a positive relationship (Hira and Mugenda, 1998;Gutter and Copur, 2011;Michael Collins and Urban, 2020). However, some authors reported that financial wellbeing level decreases at an older age (Chatterjee et al, 2019;Garc ıa-Mata et al, 2022).…”

“…However, some authors reported that financial wellbeing level decreases at an older age (Chatterjee et al, 2019;Garc ıa-Mata et al, 2022). On the same note, education is positively influenced by financial wellbeing in the literature of (Hira and Mugenda, 1998;Shim et al, 2009;Sabri et al, 2012;Adam et al, 2017;Xiao and Porto, 2017;Chatterjee et al, 2019;Garc ıa-Mata et al, 2022). Notably, some researchers have studied the influence of gender on financial wellbeing.…”

“…Swamy (2014) examined that women utilize the resources to improve the household's wellbeing and considerably increase the saving levels of families. On the other hand, Hira and Mugenda (1998), Garc ıa-Mata et al (2022) found that marital status and financial wellbeing have a good association. However, Gutter and Copur (2011) found a negative relationship between marital status and financial wellbeing.…”

Determinants of financial worry

“…Research studies to date are in unequivocal agreement about the detrimental effects of FW. Consumers with elevated levels of FW reported poor self-rated health (Lenton & Mosley, 2008), poor psychological health (Salari & Zhang, 2006), low financial satisfaction (Hira & Mugenda, 1998), low financial well-being (Bayuk & Altobello, 2019), low life satisfaction (Tay et al, 2017), and saved less for retirement (Neukam & Hershey, 2003). Furthermore, they performed poorly at work (Meuris & Leana, 2018), showed reduced cognitive capacity (Mani et al, 2013;Meuris & Leana, 2018), and greater difficulties processing retirement concepts (Gutierrez & Hershey, 2013).…”