Abstract
Recent political and financial reforms have increased pressures on individuals in terms of responsibility for financial security in retirement. However, certain preconditions must be fulfilled if an individual is to make such decisions—we group these under the concept of financial literacy. Our empirical data explores three dimensions of financial literacy: abilities (mathematical skills and financial habits), values, and information. We assume that active and healthy ageing requires certain advance planning in the form of active interventions in various areas of life. We can assume that financial security significantly conditions the success, quality, and intensity of such planning. Hence, we explored whether individuals a decade or less prior to retirement demonstrate attitudes that link financial literacy and other forms of planning for old age. We take into account the fact that the heterogeneous senior population does not view retirement as a universal and unified experience and the urge to plan can vary depending on the expected/planned retirement lifestyle.
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Notes
- 1.
We believe that most risks in old age can be characterized as financial ones. Health, adequate housing, social participation, as well as interpersonal relationships are easier to achieve with sufficient financial resources. Although these are not the only necessary conditions, they doubtless represent a positive intervening factor.
- 2.
That is, Time, April 18, 2011 (p. 9) quotes LifeGoesStrong.com: 1 in 4 baby boomers say they’ll never retire and about the same percentage say they have no retirement savings.
- 3.
Apart from numeracy, SIALS also explored literacy in relation to textual information (prose literacy) and information contained in documents like questionnaires and figures (document literacy).
- 4.
In the representative survey Ageism 2007, 7 % of the respondents stated that the share of the elderly in the Czech population was 50 % or more (there were also answers of 100 %). Vidovićová (2008) argues that these reflect inadequacies in numeracy skills (confusing “share” with “percentage” in this case) rather than a lack of knowledge of demographics.
- 5.
Missing answers were also coded as incorrect, these represented on average less than 1 % for all the four tasks.
- 6.
For example, the informative table on retirement age of those born 1936–1968 has 34 rows (birth cohorts) and 8 columns (men and women with different numbers of children). The retirement age of a man born in 1952 is 62 + 10 months, of a woman born in 1952 with two children 59 years. Old age pension consists of a universal basic assessment and an individually calculated percentage assessment according to the insurance period (hence, it is influenced by how long the person was insured and how much s/he earned). The final pension is calculated in six steps, i.e., mathematical operations. For information in English, see http://www.mpsv.cz/en/8672.
- 7.
See, e.g., www.choosetosave.org, http://retirementrevised.com/, http://work.lifegoesstrong.com and others that use journalistic style to guide through general retirement as well as specific financial planning. For the official version of the Czech tool for the calculation of retirement age, see: http://www.mpsv.cz/cs/2435 (in Czech).
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Vidovićová, L. (2013). Financial Literacy in Retirement Planning Context: The Case of Czech OlderWorkers. In: Phellas, C. (eds) Aging in European Societies. International Perspectives on Aging, vol 6. Springer, Boston, MA. https://doi.org/10.1007/978-1-4419-8345-9_13
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