Barriers to saving

2010

Prior studies have considered a variety of factors that may account for the variation in wealth across U.S. households. This study adds to existing literature in this area by more closely analyzing a subset of households -those considered low savers. More specifically, we empirically determine which factors most account for the low savings patterns observed by some households focusing on factors that capture financial literacy, financial planning, and risk preferences of households. We find that some factors generally have a strong and significant impact on accumulated savings regardless of the data utilized or the level of savings of the household while other factors appear to only impact the savings of certain households. We also find evidence of a substitution effect for households with employer-sponsored retirement plans. Our results suggest that financial literacy and planning can significantly impact savings patterns. As such, financial education resulting in a better understanding of the important role of personal savings as a component of retirement planning might serve to increase personal savings. This could result in less reliance on government programs such as Social Security to ensure households are able to maintain an acceptable standard of living during retirement.

Journal of Economic Surveys, 2018

This paper examines different barriers to formal saving, considering various interventions and their possible effects at microeconomic and macroeconomic levels. It presents a comprehensive review of the literature, based on a detailed classification of the barriers associated with supplyside factors, related to access to financial products, and demand-side barriers, related to the use and frequency of use of those products. The paper concludes that this classification and analysis contributes to a fuller understanding of the question of financial inclusion, and how to achieve it.

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Akron law review, 2017

and an estimated 2.5 million workers lack access to a work-based retirement savings account. 2 Faced with little "protection against the economic fears of old age," 3 many workers in the Land of Lincoln are "coming up short" on their retirement savings. Many of these workers are low-income earners. A study by the Woodstock Institute 6 in 2012 found that over half of all private-sector workers in Illinois lack access to employment-based retirement plans, 7 including over half of all privatesector workers in the Chicago Metropolitan Statistical Area alone. Overall, a majority of private-sector workers in each of Illinois's 177 legislative districts lack access to employment-based retirement plans. 9

2007

In view of the government's propensity to develop programs to encourage savings, we examine a group of individuals to whom these programs are targeted: low-to moderate-income taxpayers. We show that saving for retirement is not a priority in the lives of these taxpayers. The low priority given to saving is often due to immediate necessary costs such as housing, food, and transportation. However, our study shows that even nonessential items and activities such as cable and internet services or travel are often considered more important than saving. We also show that most of the participants were not even aware of the tax incentives available to them. In light of these results and evidence from other studies showing that individuals will save when given the right opportunities, we support arguments in favor of modifying the current "Saver's Credit" and adopting the Automatic Individual Retirement Account (IRA) currently proposed in Congress. We also suggest an "opt-out" program offered through direct deposit or small employers along with a government match as an alternative way of packaging incentives for retirement savings. By making the retirement vehicle readily available with a transparent, immediate match, the effectiveness of the incentive should increase dramatically for those qualified.

Pension Research Council Working Papers, 1998

By B. Douglas Bernheim; Financial Illiteracy, Education, and Retirement Saving.

Assets for the Poor: The benefits of spreading …, 2001

Journal of Modelling in Management, 2019

PurposeThe purpose of this paper is to holistically study barriers in the path of implementation of retirement planning, as the need is increasing with decrease in mortality. The proper retirement planning can be one of the most important tools to control financial expenses on healthcare and welfare on old age population in government budgets.Design/methodology/approachThe paper is a blend of theoretical framework and practical application and uses interpretive structural modeling (ISM) analysis to draw linkage and impact of identified barriers in the path of achievement of goals of retirement planning. The study has used three different research phases: identification of barriers from the literature, interviews with experts of industry at second stage and designing an ISM impact matrix cross-reference multiplication model. The identification phase led to the selection of 15 factors from past literature and by suggestion from industrial experts.FindingsThis study seeks to identify w...

SSRN Electronic Journal, 2004

The Center for Retirement Research at Boston College, part of a consortium that includes a parallel centers at the University of Michigan and the National Bureau of Economic Research, was established in 1998 through a grant from the Social Security Administration. The goals of the Center are to promote research on retirement issues, to transmit new findings to the policy community and the public, to help train new scholars, and to broaden access to valuable data sources. Through these initiatives, the Center hopes to forge a strong link between the academic and policy communities around an issue of critical importance to the nation's future.