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

Learn More →

Financial Risk Tolerance, Sensation Seeking, and Locus of Control Among Pre-Retiree Baby Boomers

Financial Risk Tolerance, Sensation Seeking, and Locus of Control Among Pre-Retiree Baby Boomers Financial risk tolerance is an important personal characteristic that is widely used by financial professionals to guide the development and presentation of client-centered recommendations. As more baby boomers enter retirement, research on how these individuals perceive their willingness to take financial risks has gained importance, particularly as the focus of investment portfolios changes from capital accumulation to capital preservation in retirement. This study examined the role of sensation seeking and locus of control on financial risk tolerance for a pre-retiree baby boomer sample using the 2014 wave of the National Longitudinal Survey of Youth 1979. Findings from three ordinary least square (OLS) regression models showed that baby boomers who were not sensation seekers, and those who displayed an external locus of control orientation were more likely to exhibit a low tolerance for financial risk. Furthermore, those who engaged in sensation-seeking behavior were more likely to have an internal locus of control orientation and a high tolerance for risk. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Financial Counseling and Planning Springer Publishing

Financial Risk Tolerance, Sensation Seeking, and Locus of Control Among Pre-Retiree Baby Boomers

Loading next page...
 
/lp/springer-publishing/financial-risk-tolerance-sensation-seeking-and-locus-of-control-among-d5skgxsuz1
Publisher
Springer Publishing
Copyright
© 2021 Springer Publishing Company
ISSN
1052-3073
eISSN
1947-7910
DOI
10.1891/jfcp-18-00072
Publisher site
See Article on Publisher Site

Abstract

Financial risk tolerance is an important personal characteristic that is widely used by financial professionals to guide the development and presentation of client-centered recommendations. As more baby boomers enter retirement, research on how these individuals perceive their willingness to take financial risks has gained importance, particularly as the focus of investment portfolios changes from capital accumulation to capital preservation in retirement. This study examined the role of sensation seeking and locus of control on financial risk tolerance for a pre-retiree baby boomer sample using the 2014 wave of the National Longitudinal Survey of Youth 1979. Findings from three ordinary least square (OLS) regression models showed that baby boomers who were not sensation seekers, and those who displayed an external locus of control orientation were more likely to exhibit a low tolerance for financial risk. Furthermore, those who engaged in sensation-seeking behavior were more likely to have an internal locus of control orientation and a high tolerance for risk.

Journal

Journal of Financial Counseling and PlanningSpringer Publishing

Published: Jun 2, 2021

References