Impact of Parental Financial Socialization on Individual’s Retirement Savings

Abstract

The world is growing older. With the shift in demographic, it is crucial that policymakers take such changes into account. Although the US is aging, only a small number of Americans have adequate retirement savings. Therefore, the government should encourage people to save and invest more to ensure they are financially self-sufficient when they retire. Given the high stake of this issue, several studies have examined factors affecting individuals’ retirement savings. Most studies focus on socioeconomic characteristics and financial education in school, but very limited studies focus on how parents could affect their off springs’ retirement savings. This paper focuses on the effects of parental financial socialization on individuals’ retirement savings. The paper further explores whether there is a difference between the effects of mother and father on their children’s retirement savings through the parental financial socialization process. The findings suggest that only mothers influence their children’s retirement savings.