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Stormy Futures? The Impact of Climatic Shocks on Retirement Savings

Author

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  • Kucuk, Merve
  • Ulubasoglu, Mehmet
  • Vu, Ha

Abstract

Climatic shocks introduce additional complexities to individuals’ lives and influence their critical decisions, both present and into the future. We utilise longitudinal administrative data on Australian individual retirement contributions to present the first estimated effects of natural disasters on retirement savings. Using the 2010-2011 Queensland floods as a natural experiment, we document that retirement contributions increase following the disaster. We show that individuals update their risk perceptions post-disaster, which drive changes in their portfolio choices across retirement savings, investment property ownership, and other interest-generating financial instruments. Our findings offer important insights into the relationship between individuals' planning horizons, retirement savings and their adaptive strategies in maintaining retirement welfare amidst demographic changes and increased environmental risks.

Suggested Citation

  • Kucuk, Merve & Ulubasoglu, Mehmet & Vu, Ha, 2024. "Stormy Futures? The Impact of Climatic Shocks on Retirement Savings," MPRA Paper 121241, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:121241
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    File URL: https://mpra.ub.uni-muenchen.de/121241/1/MPRA_paper_121241.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    climate change; retirement savings; risk perceptions;
    All these keywords.

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • D9 - Microeconomics - - Micro-Based Behavioral Economics
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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