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Impact of financial investment on confidence in a happy future retirement

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  • Cheung, Yan-Leung
  • Mak, Billy S.C.
  • Shu, Hao
  • Tan, Weiqiang

Abstract

The study examines the impact of financial investment on the individual's confidence in a happy future retirement using data from 735 respondents in the Bank Consortium Holding Limited (BCT) Public Opinion Survey on Retirement Happiness in 2017. The result shows that holding the investment portfolio with savings and risky assets positively and significantly correlates with the individual's confidence in a happy future retirement life. This relationship is more pronounced for those with a positive attitude toward life, better financial literacy, and voluntary contribution to the retirement account. The result is robust after using the propensity score matching (PSM) approach, placebo test, alternative regression model, and the independent variables and control for additional variables. Further analysis shows that the positive relationship between holding the investment portfolio and the individual's confidence in a happy future retirement life is not driven by individuals' income, assets, and location. This paper provides empirical evidence to guide citizens' investments and improve the pension system to cope with the aging population in Hong Kong.

Suggested Citation

  • Cheung, Yan-Leung & Mak, Billy S.C. & Shu, Hao & Tan, Weiqiang, 2023. "Impact of financial investment on confidence in a happy future retirement," International Review of Financial Analysis, Elsevier, vol. 89(C).
    • Handle: RePEc:eee:finana:v:89:y:2023:i:c:s1057521923003009
    DOI: 10.1016/j.irfa.2023.102784
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    2. Liu, Changfei & Wu, Qiong & Yang, Zuozhi, 2024. "Population aging and corporate risk-taking," Finance Research Letters, Elsevier, vol. 61(C).

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    More about this item

    Keywords

    Population aging; Confidence in a happy future retirement life; Financial investment; Investment portfolio; Hong Kong;
    All these keywords.

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • J19 - Labor and Demographic Economics - - Demographic Economics - - - Other

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