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Time Preference and Retirement Planning Strategies
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Time Preference, Retirement Savings, Retirement Strategy
Very short description for use in the program to help attendees understand more than a title can describe
Individual preferences may explain variation in retirement savings in a self-funded retirement system. One important preference is the weight placed on future consumption, or time preference. We evaluate the effect of time preference on the choice of four retirement planning strategies and accumulated retirement wealth. Results show a negative relation between rate of time preference, measured as a factor score, and the choice of a retirement planning strategy. Respondents with high time discounting are more likely to not have a plan for retirement and accumulate less retirement wealth. The negative relation between time preference and retirement savings is reduced once retirement planning strategies are included in the same model.
Lead & Corresponding Author
Terrance K Martin, Jr, PhD, Univeristy of Texas Rio Grande Valley
Job Title
Assistant Professor