Do financial networks matter in retirement investment decisions? Evidence from Generation Yers

• Published in: Financial services review (Greenwich, Conn.) Vol. 24; no. 1; pp. 77 - 99
• Main Authors: Chung, Yunhyung, Park, Youngkyun
• Format: Journal Article
• Language: English
• Published: Atlanta Financial Services Review 22.03.2015; Academy of Financial Services
• Subjects: Analysis; Business education graduates; Careers; Costs; Decision making; Defined contribution plans; Financial literacy; Financial markets; Financial planners; Forecasts and trends; Hypotheses; Influence; Investments; Knowledge; Market surveys; Methods; Millennials; Planning; Portfolio management; Retirement planning; Social interaction; Social networks; Social security; Studies; Surveys; United States
• DOI: 10.61190/fsr.v24i1.3265
• ISSN: 1873-5673; 1057-0810

Using experimental survey data collected from a sample of Generation Yers, we examine the joint influence of financial literacy and financial networks on individual retirement investment decisions. We find, first, that financial literacy and financial network intensity (the network strength with the financially literate) are positively related to stock allocation. Second, the positive relationship between financial literacy and stock allocation, however, is significant only among those having high financial network intensity. This finding suggests that the positive effects of financial literacy documented in the literature can be limited to only those who have strong networks with the financially literate.