Retirement income literacy in the aftermaths of global financial crisis: Evidence from Greece

The purpose of this study is to determine the levels of retirement literacy among consumers in Greece between the pre-retirement and the retirement age. This paper analyzes, for the first time, a randomized experiment, which offers several appealing features for an analysis of retirement income literacy in Greece, in the aftermaths of Global Financial Crisis. We use the information from a dataset of some 508 individuals from December 2016 to March 2017. The survey method used was a personal interview survey, also known as a face-to-face survey. The sample was designed to be nationally representative at the individual level. For the survey a specific target population was involved that of 50+ year old close to their retirement period or at their retirement period. The breakdown of the sample was based on geographic, economic and age characteristics. Our study contributes to the retirement literacy literature by examining its association with socioeconomic variables in a relatively understudied and interesting context, i.e. that of Greece with a relatively old and rapidly aging population, large disparities and a rapidly decrease in pensions during the Global Financial Crisis. We find that only 39,22% of the individuals in the whole sample (59,8% of those are in the retirement age) really know about the Greek State Pension System. In a country with pervasive public pension provisions, we find that retirement income literacy is significantly related to retirement planning using a combination of private and public pension systems. According to many, recent empirical studies, low levels of financial and retirement literacy is a serious social problem, as most people have a relative low knowledge about basic retirement concepts and tools. The growing youth demographic in Eastern Europe has generated interest in how to promote more responsible retirement planning with lower government intervention, and the current financial crisis has generated interest in better understanding how to promote more responsible and prudent individual saving behavior. The results of our study have a clear policy implication, along with encouraging the availability of private retirement plans and financial products, efforts to improve retirement income literacy can also be pivotal to the expansion in the use of such schemes.