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Rely on whom you trust? Trust and financial planning for retirement

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  • Yang, Qianqian
  • Ye, Zihan
  • Zhou, Haizhen
  • Mo, Weiqiao

Abstract

We study the role of trust in shaping financial planning for retirement under a three-pillar pension system. Using data from two waves of the China Retirement Readiness Index Survey and multiple measures of trust in various entities, we find that trust in government, employers, and financial institutions increases the probability of developing a financial plan involving government, employer, and self-provision, respectively, as well as the estimated proportions of retirement income derived from each source. Our study deepens the understanding of how specific trust affects planning practices in the context of multiple retirement income sources and a culture featuring filial piety.

Suggested Citation

  • Yang, Qianqian & Ye, Zihan & Zhou, Haizhen & Mo, Weiqiao, 2024. "Rely on whom you trust? Trust and financial planning for retirement," Finance Research Letters, Elsevier, vol. 69(PA).
    • Handle: RePEc:eee:finlet:v:69:y:2024:i:pa:s1544612324011711
    DOI: 10.1016/j.frl.2024.106142
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    More about this item

    Keywords

    Financial planning for retirement; Trust; Old-age provision;
    All these keywords.

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions

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