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Spending from regulated retirement drawdowns: The role of implied endorsement

Author

Listed:
  • Jennifer Alonso Garcia
  • Hazel Bateman
  • Johan Bonekamp
  • Ralph Stevens

Abstract

We fielded an online survey in the Netherlands and Australia to explore the influence of an implied endorsement nudge, conveyed by a government-regulated drawdown from pension wealth, on spending patterns in retirement. The implied endorsement nudge was effective. It influenced the preferred retirement spending patterns of around 30 percent of survey participants, particularly those with fewer financial resources and low pension capability. Australian participants were more likely to follow the nudge where it was framed as implicit government advice, while the Dutch were more likely to respond to a suggestion that the nudge was a recommendation from peers. Our results provide support for a regulated drawdown rule as part of a strategy to guide spending patterns in retirement.

Suggested Citation

  • Jennifer Alonso Garcia & Hazel Bateman & Johan Bonekamp & Ralph Stevens, 2021. "Spending from regulated retirement drawdowns: The role of implied endorsement," ULB Institutional Repository 2013/307899, ULB -- Universite Libre de Bruxelles.
    • Handle: RePEc:ulb:ulbeco:2013/307899
    Note: SCOPUS: ar.j
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    References listed on IDEAS

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    1. Lusardi, Annamaria & Mitchell, Olivia S., 2011. "Financial literacy around the world: an overview," Journal of Pension Economics and Finance, Cambridge University Press, vol. 10(4), pages 497-508, October.
    2. Hazel Bateman & Christine Eckert & Fedor Iskhakov & Jordan Louviere & Stephen Satchell & Susan Thorp, 2018. "Individual Capability and Effort in Retirement Benefit Choice," Journal of Risk & Insurance, The American Risk and Insurance Association, vol. 85(2), pages 483-512, June.
    3. Isaac M. Lipkus & Greg Samsa & Barbara K. Rimer, 2001. "General Performance on a Numeracy Scale among Highly Educated Samples," Medical Decision Making, , vol. 21(1), pages 37-44, February.
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    Cited by:

    1. Ralph Stevens & Jennifer Alonso Garcia & Hazel Bateman & Arthur van Soest & Johan Bonekamp, 2022. "Saving preferences after retirement," ULB Institutional Repository 2013/342267, ULB -- Universite Libre de Bruxelles.
    2. Alonso-García, Jennifer & Bateman, Hazel & Bonekamp, Johan & van Soest, Arthur & Stevens, Ralph, 2022. "Saving preferences after retirement," Journal of Economic Behavior & Organization, Elsevier, vol. 198(C), pages 409-433.
    3. Butt, Adam & Khemka, Gaurav & Warren, Geoffrey J., 2022. "Heterogeneity in optimal investment and drawdown strategies in retirement," Pacific-Basin Finance Journal, Elsevier, vol. 74(C).
    4. Bonekamp, Johan & van Soest, Arthur, 2022. "Evidence of behavioural life-cycle features in spending patterns after retirement," The Journal of the Economics of Ageing, Elsevier, vol. 23(C).

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    More about this item

    Keywords

    Decumulation policy; implied endorsement; peer effects; regulated drawdowns;
    All these keywords.

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