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Financial Software Use and Retirement Savings

Financial Software Use and Retirement Savings <p>Financial software offers an appealing substitute for an investment in complex financial knowledge to help individuals make better financial decisions. Little is known, however, about which consumers use financial software and whether the use of financial software results in improved financial outcomes. Using data from the 2008 National Longitudinal Survey of Youth 1979 cohort (NLSY79), we find that respondents with greater human capital and financial resources are more likely to use financial software. The use of a financial software program to calculate retirement needs is a stronger independent predictor of accumulated retirement wealth than calculating retirement needs without a computer aid and is surpassed only by cognitive ability as an independent predictor of retirement savings. Results suggest that financial software is used primarily by those that have greater endowed and attained human capital and may be a complement to (rather than a substitute for) financial literacy.</p> http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Financial Counseling and Planning Springer Publishing

Financial Software Use and Retirement Savings

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Publisher
Springer Publishing
ISSN
1052-3073
eISSN
1947-7910
DOI
10.1891/1052-3073.28.1.107
Publisher site
See Article on Publisher Site

Abstract

<p>Financial software offers an appealing substitute for an investment in complex financial knowledge to help individuals make better financial decisions. Little is known, however, about which consumers use financial software and whether the use of financial software results in improved financial outcomes. Using data from the 2008 National Longitudinal Survey of Youth 1979 cohort (NLSY79), we find that respondents with greater human capital and financial resources are more likely to use financial software. The use of a financial software program to calculate retirement needs is a stronger independent predictor of accumulated retirement wealth than calculating retirement needs without a computer aid and is surpassed only by cognitive ability as an independent predictor of retirement savings. Results suggest that financial software is used primarily by those that have greater endowed and attained human capital and may be a complement to (rather than a substitute for) financial literacy.</p>

Journal

Journal of Financial Counseling and PlanningSpringer Publishing

Published: Jan 1, 2017

References