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The importance of personality characteristics and behavioral constraints for retirement saving

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  • Piotrowska, Maria

Abstract

The paper explores the retirement saving habits of well-educated Poles of mobile working age. The data on personality characteristics as well as behavioral constraints include personality traits, procrastination, locus of control, pessimism, compulsive buying, and time perspective. The purpose of the paper is to reveal personality characteristics and behavioral constraints that could be relevant in explaining retirement saving, estimating the money needed for retirement and having a plan for retirement saving. The research uses relative weight analysis and mediation analysis. The findings show that procrastination influences the decision about whether to save for retirement, even if income is included as a control. This suggests that the procrastination problem makes saving for retirement difficult regardless of income. Procrastination is also a significant mediator through which personality characteristics and time perspectives influence retirement saving. Compulsive buying affects retirement saving through two mechanisms, one based on the idea that money is a symbol of power and prestige, and another one which produces feelings of guilt. Locus of control and future-time orientation are significant in explaining the decision to plan for retirement. Pessimism influences retirement saving actions both negatively and positively, depending on how this influence is transmitted. The findings show various effects of personality and behavior on saving, which can be used in designing savings and pension schemes.

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  • Piotrowska, Maria, 2019. "The importance of personality characteristics and behavioral constraints for retirement saving," Economic Analysis and Policy, Elsevier, vol. 64(C), pages 194-220.
    • Handle: RePEc:eee:ecanpo:v:64:y:2019:i:c:p:194-220
    DOI: 10.1016/j.eap.2019.09.001
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    More about this item

    Keywords

    Retirement saving; Personal traits; Procrastination; Locus of control; Time perspective;
    All these keywords.

    JEL classification:

    • G41 - Financial Economics - - Behavioral Finance - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets

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