Financial Literacy Confidence and Retirement Planning : Evidence from China

Though there is ample empirical evidence demonstrating the relationship between objective financial literacy and retirement planning, we have limited understanding on the role of subjective financial literacy and financial literacy confidence level in individual's retirement planning. In this paper, we conduct a survey to examine how individual's financial literacy confidence bias affects their retirement planning behaviors in China. The survey measures both the respondent's subjective and objective financial literacy, as well as their assessment and actual actions with respect to their retirement planning. We find that financial literacy overconfidence (under-confidence) significantly promotes (demotes) individual's retirement planning behaviors