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The Psychological Predictors of Older Preretirees’ Financial Self-Efficacy

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  • Sarah D. Asebedo
  • Martin C. Seay
  • Kristy Archuleta
  • Gary Brase

Abstract

Financial self-efficacy (FSE) is a psychological trait that has significant influence over a wide array of financial behavior—from credit market participation to saving and investing behavior. Research has provided consistent evidence that suggests higher FSE supports prudent and growth-oriented financial behavior across a variety of samples. For older adults, FSE has been shown to be weak and susceptible to decline, which is concerning because older adults need to save significantly for retirement, with little time to do so. While research has provided some insight into the sociodemographic and economic factors related to FSE (e.g., income), little is understood about the psychological factors that contribute to FSE levels. Consequently, the authors investigate how psychological characteristics shape FSE within a sample of 2,068 U.S. preretirees from the Health and Retirement Study. Results revealed that FSE can be supported through frequent positive affect, reduced negative affect, stronger mastery beliefs, and a higher task orientation. With this knowledge, financial professionals can more effectively help support older preretirees’ FSE and ultimately, their ability to prepare financially for retirement.

Suggested Citation

  • Sarah D. Asebedo & Martin C. Seay & Kristy Archuleta & Gary Brase, 2019. "The Psychological Predictors of Older Preretirees’ Financial Self-Efficacy," Journal of Behavioral Finance, Taylor & Francis Journals, vol. 20(2), pages 127-138, April.
    • Handle: RePEc:taf:hbhfxx:v:20:y:2019:i:2:p:127-138
    DOI: 10.1080/15427560.2018.1492580
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    Cited by:

    1. Amatulli, Cesare & Peluso, Alessandro M. & Sestino, Andrea & Guido, Gianluigi & Belk, Russell, 2023. "The influence of a lockdown on consumption: An exploratory study on generation Z's consumers," Journal of Retailing and Consumer Services, Elsevier, vol. 73(C).
    2. Elise Frølich Furrebøe & Ellen Katrine Nyhus, 2022. "Financial self‐efficacy, financial literacy, and gender: A review," Journal of Consumer Affairs, Wiley Blackwell, vol. 56(2), pages 743-765, June.
    3. Jinhee Kim & Mariana K. Falconier & C. Andrew Conway, 2023. "Relationships Among Emotion Regulation, Financial Self-Efficacy, and Financial Management Behaviors of Couples," Journal of Family and Economic Issues, Springer, vol. 44(2), pages 342-355, June.

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