Chapter

Annuities, Financial Literacy, and Information Overload

Julie Agnew and Lisa Szykman

in Financial Literacy: Implications for Retirement Security and the Financial Marketplace

Published in print October 2011 | ISBN: 9780199696819
Published online January 2012 | e-ISBN: 9780191732089 | DOI: http://dx.doi.org/10.1093/acprof:oso/9780199696819.003.0009

Series: Pensions Research Council

Annuities, Financial Literacy, and Information Overload

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This chapter investigates how financial literacy and information overload influence the decision to purchase an annuity and how they relate to subsequent confidence and satisfaction. Using a dataset from a large-scale experiment, we find that as financial literacy increases, information overload decreases. In addition, people who experience higher levels of information overload are less confident in their choice and are less satisfied with their decision. We recommend that educators and retirement plan architects consider simplifying the decision environment in addition to improving financial literacy with the goal of increasing investor confidence and satisfaction.

Keywords: annuity; financial literacy; investment; education; retirement; market; annuitize

Chapter.  8094 words. 

Subjects: Pensions

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