The impact of post‐retirement financial market participation on retirement income sufficiency in Australia

Using HILDA survey data, we document a strong positive relationship between post‐retirement financial market participation and retiree income sufficiency in Australia. We find a 17% improvement in the income replacement ratio and a 3.26 times higher annuitised net wealth for financial market partici...

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Bibliographic Details
Published inAccounting and finance (Parkville) Vol. 64; no. 1; pp. 903 - 939
Main Authors Xu, Xiaobo, Fang, Jiali, Young, Martin, Zou, Liping
Format Journal Article
LanguageEnglish
Published Clayton Blackwell Publishing Ltd 01.03.2024
Subjects
Ageing population
Annuitised net wealth
Financial market participation
Replacement ratio
Subjective financial wellbeing
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Summary:Using HILDA survey data, we document a strong positive relationship between post‐retirement financial market participation and retiree income sufficiency in Australia. We find a 17% improvement in the income replacement ratio and a 3.26 times higher annuitised net wealth for financial market participants compared to non‐participants. We further investigate how age, residence area, relationship status, education, health, and employment affect the main finding in all and female retirees. The results highlight the value of financial market participation in facilitating household retirement security and provide further support for the active promotion of household financial market participation, both in Australia and globally.
ISSN:0810-5391
1467-629X
DOI:10.1111/acfi.13169