Voluntary Retirement Savings: The Case of Australia
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The shift to defined contribution plans has increased concerns about retirement adequacy for the working population. Different from prior research in countries where retirement savings are voluntary, this study explored the drivers of additional savings within the Australian superannuation system where mandatory savings are in place. Results suggested that age, economic and financial status, and job characteristics are important indicators for voluntary superannuation savings. Affordability, false beliefs, and lack of awareness about retirement savings inhibit participation. Past saving habits and retirement planning positively affect voluntary retirement savings. Joint modelling of pre- and post-tax savings decisions suggested a substitution effect between the two, adding new evidence to the literature.
KeywordsRetirement saving behavior Voluntary retirement savings Saving plan participation Mandatory retirement saving system Personal finance Consumer economics
JEL classificationJ32 D14 D03
The author would like to thank the editor, four anonymous reviewers, Professor Christine Brown, Professor Hazel Bateman, and Catherine Barratt for their constructive suggestions and helpful comments that improved the quality and the exposition of the paper. The findings and views reported in the paper are of those of the author.
Compliance with Ethical Standards
Conflict of interest
The author declares that he has no conflict of interest.
This article does not contain any studies with human participants or animals performed by any of the authors.
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