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2023 Annual Conference

du 16 au 18 May 2023

Palace Station Hotel & Casino, Las Vegas, NV, US

IMPORTANT NOTICE: The date, time, and room assignment of YOUR presentation is SUBJECT TO CHANGE.

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208 The Impact of the COVID-19 Labor Market Shock on Withdrawals From Retirement Accounts: Understanding the Moderating Role of Financial Knowledge

mercredi 17 mai 2023 à 17:15–18:15 PDT
Room 5 Posters
Short Description

We explored the effects of COVID-19 labor market shocks and COVID-19 diagnoses on the likelihood of hardship withdrawals or plan loans from retirement accounts. Such withdrawals could substantially reduce the level of living of workers in retirement. We found that over 16% of working age respondents took a hardship withdrawal or plan loan. Those reporting a COVID-19 labor market shock had 3.8 times higher odds of a hardship withdrawal than otherwise comparable respondents who did not have a shock. We also found that the impact of a COVID-19 related labor shock was moderated by the objective and subjective financial knowledge of individuals, implying a potential role of financial education in alleviating the risks to retirement. The most salient result is that respondents with financial knowledge overconfidence were much more likely to take a plan loan or a hardship withdrawal than those with appropriate or low levels of confidence. We also found that in addition to the positive impact of a labor shock on the chance of withdrawals, those who reported having tested positive for COVID-19 had odds of a hardship withdrawal as much as 2.1 times as high as the odds for otherwise comparable respondents who did not test positive.

Type of presentation

Accepted Poster Presentation

Submitter

Sunwoo Lee, York University

Authors

Sunwoo Lee, York University
Kyoung Tae Kim, University of Alabama
Sherman Hanna, The Ohio State University
Chargement en cours …