Retirement saving: an analysis of psychological factors – portuguese case

Dissertation presented as the partial requirement for obtaining a Master's degree in Statistics and Information Management, specialization in Risk Analysis and ManagementAmong the Portuguese population, the retirement system has been questioned whether it is reliable or not, and if they will ever be able to benefit from it when time comes. These consequences led to the need of a more active precautionary saving and a retirement complement by the Portuguese population. A new paradigm in the retirement system was discovered when voluntary pension emphasized the global demographic changes and retirement savings adequacy. This led to a development of the private retirement systems, encouraging the population to a more individualistic contribution plan. Though these decisions are strongly pressured by external factors, so it was important to understand what influences people to save for retirement. This present study objective is to attempt to better understand the factors that underlie individuals’ motivations to save for retirement. It became relevant to understand if individuals demonstrate any psychological predisposition for or against retirement saving and which factors affect their saving habits when it happens. Using a logistic regression model, it was selected a set of individuals’ socioeconomic and psychological factors to quantify the predisposition to save for retirement using a database from a survey. The results revealed that Psychological factors have a significant influence on the Retirement Saving predisposition, being in line with previous studies. The main contributions of this research are related to the characterization of Portuguese savers for retirement - as opposed to previous studies, mainly focused on Anglo-Saxon countries -; as well as the inclusion of new potential driving factors of retirement saving, such as psychological factors. Findings have important theoretical implications on how individuals who are differentially prone towards saving should be approached