Joelle H. Fong|Benedict Koh|Olivia S. Mitchell|Susann Rohwedder
Financial Literacy and Suboptimal Financial Decisions at Older Ages
National University of Singapore|Singapore Management University|University of Pennsylvania|National Bureau of Economic Research|RAND Corporation
lifecycle wealth holdings tend highest early part retirement quality financial decisions among older adults therefore important determinant financial security asset drawdown phase paper assesses financial literacy shapes financial decisionmaking older ages devised special module singapore life panel survey measure financial literacy study relationship three aspects household financial investment behaviors credit card debt repayment stock market participation adherence agebased investment glide paths found majority respondents age 50 grasp concepts interest compounding inflation fewer know risk diversification provide evidence statistically significant positive association financial literacy three aspects suboptimal financial decisionmaking controlling many factors including education oneunit increase financial literacy score associated 83 percentage point greater propensity hold stocks 17 percentage point higher likelihood following ageappropriate investment glide path financial literacy score weakly positively linked timely credit card balance repayment terms statistical significance estimate size