The paper examines how an individual’s time perspective and financial literacy is linked to their retirement saving behaviour. It tests the assumption that individuals don't save enough for their retirement because they have either limited cognitive abilities and are not financially literate, or they lack future time perspective and crave immediate consumption. It utilises the time perspective theory assumption that an individual's perception of time influences their actions and decision-making processes.
The research is based on a field survey of 306 working adults aged 35–65. The participants were surveyed on their financial literacy and were asked questions to determine their time preference. Three months later, they were surveyed a second time, on their retirement saving behaviour since the first survey.
Significant findings of the study show that the participants with a future time perspective had a higher predicted likelihood to save for retirement and a larger amount saved. Their financial literacy had no significant effect on their retirement savings.
The authors of "Two-lane road to retirement? Financial literacy versus time preferences" are Anna Giardano, Orla Gough, Claudia Niza and Kristina Vasileva.
For further information about the paper, please contact Dr Claudia Niza at [email protected].