ACCI Conference 2020

This study investigates various contributing factors associated with estate planning of US households. In particular, we focused on the role of financial education on a basic estate planning, i.e., having a will comprehensively using four measures as follows; (a) participation in financial education, (b) types of organization, (c) total number of hours and (d) overall quality of financial education. The main contribution of this study is twofold. A number of studies on various financial decisions and behaviors have been conducted, but a topic of estate planning has been understudied relatively. Further, this study provides a comprehensive overview of how financial education impacts one’s estate planning using the 2018 National Financial Capability Study (NFCS) dataset. To check the robustness of our results, we conducted similar analyses across subsamples of three generations, Millennials, Generation X and Baby boomers.

Author(s): Richard Stebbins, Kyound Tae (KT) Kim

The purpose of this research is to assess factors associated with objective retirement income adequacy (RIA) from the perspectives of genders and two generations. The study compares Baby Boomers and Generation X, as well as males versus females across three time periods - 1989, 2001, and 2016 - utilizing the Survey of Consumer Finances. Identifying the factors that may affect the objective RIA of these two generations is important as each has faced a different retirement planning environment. Analyzing gender differences is important because often women are found to be less prepared, less risk tolerant, and lower compensated than men. Potential influential factors include the projected availability and amount of Social Security benefits, type and accessibility of employer-based retirement plans, economic conditions, labor market participation pattern, gender and racial equity, educational attainment, marital status, investment risk tolerance, and debt constraint.  

Author(s): Dalisha Herring, Deanna Sharpe, and Joan Hermsen

Considering the growing importance of 401(k) plans in the retirement preparation of Americans, exploring how retirement plan participants manage their assets in 401(k) plans and why they make investment decisions is important. This study uses primary data to investigate the contributing factors associated with the decision to manage investment allocation in retirement plans, focusing on self-directed management versus choosing recommended portfolios such as target-date funds (TDF) or risk-based portfolios. Characteristics related to default effects (financial knowledge, experience, and loss aversion) and characteristics related to customized needs (risk tolerance, retirement age, and life expectancy) are key interests in the current study. This study contributes to the growing literature surrounding the default effect in behavioral economics with findings that can be applied to the largest investment many people make in life.

Author(s): HanNa Lim, Richard Stebbins, Travis Sholin