Too soon to worry? Longitudinal examination of financial planning for retirement among Spanish aged workers

Abstract

The present study analyzes the relationship between three distal antecedents—financial literacy, confidence in retirement, and economic well-being—and financial planning for retirement evaluated at two different times. We used longitudinal data with repeated measures of financial planning for retirement obtained from a sample (N = 269) of active Spanish workers aged 45–62 years. The results confirm that self-perceived financial knowledge, confidence in retirement, and economic well-being are associated with financial planning for retirement at three and six months. The stability of financial planning for retirement over time was a relevant finding in the present research, even though different measures have been employed in the two waves and financial planning decreases slightly at three months. While the first step of planning, at three months, has predictive power over the second, at six months, there are possible moderators in the relationship between financial planning for retirement at time 1 and time 2, which were not explored. The implications of the results both for financial education and Policy-makers are discussed. Future lines of research can explore these relationships including objective measures of income, as wealth accumulation.

Understanding the role of financial health literacy in midlife and old age: A scoping review

“…Appendix C presents how the included studies defined these two constructs. For instance, financial literacy involved skills for obtaining, understanding and applying financial concepts to facilitate better financial decisions/outcomes (Bavafa et al, 2019 ; Bennett et al, 2012 ; Gousia, 2016 ; James et al, 2018 ; Palací et al, 2018 ; Patel et al, 2016 ). This definition can be compared to health literacy, which posited that health‐related knowledge and skills could promote better healthcare decisions/outcomes (Bennett et al, 2012 ; Lamar et al, 2019 ).…”

“…Eight studies confirmed the complementary relationships between the two concepts—financial literacy and health literacy. Financial literacy was related to increased retirement planning behaviours (Chambers et al, 2021 ; Palací et al, 2018 ; Topa et al, 2018 ); availing private long‐term care insurance (Gousia, 2016 ); obtaining additional health insurance other than government or employer‐provided insurance plans (Bavafa et al, 2019 ; Topa et al, 2018 ); and preventing delays or non‐fulfilment of therapeutic regimen due to costs (i.e. cost‐related nonadherence; Lamar et al, 2019 ; Patel et al, 2016 ).…”

“…interest rates, inflation, stocks and mutual funds) and financial behaviours (e.g. planning, saving, spending within means and managing debts; Bavafa et al, 2019 ; Bennett et al, 2012 ; Boyle et al, 2013 ; Gousia, 2016 ; Han et al, 2015 ; James et al, 2012 , 2018 ; Kapasi et al, 2019 ; Lamar et al, 2019 ; Palací et al, 2018 ; Patel et al, 2016 ; Stewart, Boyle, et al, 2018 ; Stewart, Yu, et al, 2018 ; Stewart et al, 2020 ; Topa et al, 2018 ; Weissberger et al, 2019 ; Wilson et al, 2017 ; Yu et al, 2017 , 2018 , 2020 , 2021 ); while health literacy was assessed through various aspects, including confidence in filling medical forms (Bavafa et al, 2019 ); healthcare‐related numeracy/reading skills (Gillen et al, 2020 ; Sivakumar et al, 2016 ); and knowledge of Medicare, medication use instructions and risks, and common causes of mortality in older people (Bennett et al, 2012 ; Boyle et al, 2013 ; Han et al, 2015 ; James et al, 2012 ; Kapasi et al, 2019 ; Lamar et al, 2019 ; Stewart, Boyle, et al, 2018 ; Stewart, Yu, et al, 2018 ; Stewart et al, 2020 ; Weissberger et al, 2019 ; Wilson et al, 2017 ; Yu et al, 2017 , 2018 , 2020 , 2021 ). On the other hand, health insurance literacy was partly assessed in those studies that included Medicare knowledge in the evaluation tools.…”

“…For instance, Chambers et al ( 2021 ) investigated the financial preferences/behaviours related to retirement planning and healthcare management. Two studies assessed middle‐aged and older adults' financial planning for retirement (Palací et al, 2018 ; Topa et al, 2018 ). Four articles explored problems in following healthcare instructions/paying medical bills due to financial difficulties, utilising the concepts of cost‐related nonadherence and medical financial hardship (Atake, 2020 ; Patel et al, 2016 ; Wiltshire, Garcia Colato, et al, 2021 ; Zhao et al, 2019 ).…”

Dimensions of Preparation for Aging: A Systematic Review

“…Furthermore, advice on financial plans through a financial expert (13,18,24,26,31,39,40,43,50,51,54) and collecting financial information (44) are among the factors measured in these studies.…”