The savings and investment decisions of planners

a cross-sectional study of college employees

Authors

  • Richard Deaves DeGroote School of Business, McMaster University, Hamilton, Canada
  • E. Theodore Veit bCrummer Graduate School of Business, Rollins College, Winter Park, FL
  • Gokul Bhandari DeGroote School of Business, McMaster University, Hamilton, Ontario, Canada
  • John Cheney Department of Finance, University of Central Florida

DOI:

https://doi.org/10.61190/fsr.v16i2.4883

Keywords:

Investments, Employee benefits, Risk tolerance, Financial planning, Pensions and retirement planning, Personal finance

Abstract

We report the results of a survey of college employees who are eligible for their institution's 403(b) plan. We evaluate each employee's "propensity to plan," which is found to be driven by a single psychological factor. Pension contributions are positively correlated with the propensity to plan. Other demographic attributes such as gender, marital status, age, and salary also matter. Surprisingly, men saved less than women did. We also created a subjective risk-tolerance score for each participant, and conclude that those with a higher propensity to plan are more risk tolerant. Risk taking is positively associated with income, and (surprisingly) negatively associated with age.

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Published

2007-06-30

Issue

Vol. 16 No. 2 (2007): FSR Summer 2007

Section

New Original Submission

License

Copyright (c) 2007 Academy of Financial Services

Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.

Author(s) retain copyright and grant the Journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution-NonCommercial 4.0 International License that allows to share the work with an acknowledgment of the work's authorship and initial publication in this Journal.

This license allows the author to remix, tweak, and build upon the original work non-commercially. The new work(s) must be non-commercial and acknowledge the original work.

How to Cite

The savings and investment decisions of planners: a cross-sectional study of college employees. (2007). Financial Services Review, 16(2), 117-133. https://doi.org/10.61190/fsr.v16i2.4883