Consumer Financial Knowledge and Retirement Planning Behaviors

With the increasingly serious problem of population aging around the world, the issue of consumer retirement planning behaviors has been highlighted in recent years. The purpose of this study is to investigate the effect of consumer financial knowledge on retirement planning behaviors. Utilizing the data from the National Financial Capability Study in 2009, 2012, 2015, and 2018, this study measures consumer retirement planning behavior through the variables of whether consumers have retirement accounts and whether they regularly contribute to their retirement account. To verify the robustness, a series of additional regressions are conducted by replacing the estimation approach and dropping income outliers. The results imply that consumers with a high level of financial knowledge tend to perform desirable retirement behaviors. Based on the results, we recommend that financial education programs should be widely introduced and targeted at those who lack financial knowledge, such as the elderly and the under-educated, to stimulate consumers to improve their retirement planning behaviors.