Get 20M+ Full-Text Papers For Less Than $1.50/day. Start a 14-Day Trial for You or Your Team.

Learn More →

Financial Literacy and the Early Withdrawal of Funds From Retirement Accounts

Financial Literacy and the Early Withdrawal of Funds From Retirement Accounts This study examined the association between financial literacy and the decision to withdraw funds from different types of retirement accounts before retirement. Data from the 2012 and 2015 National Financial Capability Study were used to investigate if financial literacy may potentially influence the decision to dissave from funds already set aside for retirement. The results showed that lower financial literacy appeared to increase the likelihood to retract funds saved for retirement, across different types of retirement accounts. The importance of financial literacy persisted, even after controlling for income shocks to personal finances, the availability of precautionary savings as an alternative source of funding, and an extensive set of demographic variables. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Financial Counseling and Planning Springer Publishing

Financial Literacy and the Early Withdrawal of Funds From Retirement Accounts

Loading next page...
 
/lp/springer-publishing/financial-literacy-and-the-early-withdrawal-of-funds-from-retirement-Gr6lAYvokX
Publisher
Springer Publishing
Copyright
© 2022 Springer Publishing Company
ISSN
1052-3073
eISSN
1947-7910
DOI
10.1891/jfcp-20-00011
Publisher site
See Article on Publisher Site

Abstract

This study examined the association between financial literacy and the decision to withdraw funds from different types of retirement accounts before retirement. Data from the 2012 and 2015 National Financial Capability Study were used to investigate if financial literacy may potentially influence the decision to dissave from funds already set aside for retirement. The results showed that lower financial literacy appeared to increase the likelihood to retract funds saved for retirement, across different types of retirement accounts. The importance of financial literacy persisted, even after controlling for income shocks to personal finances, the availability of precautionary savings as an alternative source of funding, and an extensive set of demographic variables.

Journal

Journal of Financial Counseling and PlanningSpringer Publishing

Published: May 2, 2022

References