The Psychological Predictors of Older Preretirees' Financial Self-Efficacy. Issue 2 (3rd April 2019)

• Record Type: Journal Article
• Authors: Asebedo, Sarah D.; Seay, Martin C.; Archuleta, Kristy; Brase, Gary
• Is Part Of: Journal of behavioral finance. Volume 20:Issue 2(2019)
• Page Start: 127
• Page End: 138
• Publication Date: 2019-04-03
• Subjects: Financial self-efficacy -- Big 5 personality -- 3M Model of Motivation and Personality -- Older preretirees; Capital market -- Psychological aspects -- Periodicals; Finance -- Psychological aspects -- Periodicals; 332.019
• DOI: 10.1080/15427560.2018.1492580
• Languages: English
• ISSNs: 1542-7560

Abstract

Abstract: Financial self-efficacy (FSE) is a psychological trait that has significant influence over a wide array of financial behavior—from credit market participation to saving and investing behavior. Research has provided consistent evidence that suggests higher FSE supports prudent and growth-oriented financial behavior across a variety of samples. For older adults, FSE has been shown to be weak and susceptible to decline, which is concerning because older adults need to save significantly for retirement, with little time to do so. While research has provided some insight into the sociodemographic and economic factors related to FSE (e.g., income), little is understood about the psychological factors that contribute to FSE levels. Consequently, the authors investigate how psychological characteristics shape FSE within a sample of 2, 068 U.S. preretirees from the Health and Retirement Study. Results revealed that FSE can be supported through frequent positive affect, reduced negative affect, stronger mastery beliefs, and a higher task orientation. With this knowledge, financial professionals can more effectively help support older preretirees' FSE and ultimately, their ability to prepare financially for retirement.