Advances in Economics, Management and Political Sciences

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Proceedings of the 7th International Conference on Economic Management and Green Development

Series Vol. 38 , 10 November 2023


Open Access | Article

Measures to Encourage Retirement Savings in China – The Role of Loss Aversion

Enxiang Sun * 1
1 Shandong University of Finance and Economics

* Author to whom correspondence should be addressed.

Advances in Economics, Management and Political Sciences, Vol. 38, 6-12
Published 10 November 2023. © 2023 The Author(s). Published by EWA Publishing
This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
Citation Enxiang Sun. Measures to Encourage Retirement Savings in China – The Role of Loss Aversion. AEMPS (2023) Vol. 38: 6-12. DOI: 10.54254/2754-1169/38/20231877.

Abstract

As the aging of population and the lack of sufficient funds for a comfortable retirement life, saving for retirement is becoming increasingly important. People’s decisions about retirement savings are influenced by cognitive biases and heuristics, such as loss aversion. This paper examines the impact of loss aversion on pension savings in China. China’s pension reserves are slightly insufficient, and defined-benefit schemes put pressure on the government and fail to enable people to maintain their original standard of living after retirement. Therefore, this paper proposes the inclusion of save more tomorrow and annuities to address these problems. This paper also suggests simplifying the process of increasing pension savings, choosing an appropriate retirement savings rate, and diversifying investment portfolios. It highlights the need for individuals and policymakers to plan and prepare for demographic change and the impact of loss aversion on retirement savings. Recommendations are made to improve retirement savings to ensure a secure and sustainable future for all.

Keywords

retirement savings, annuities, save more tomorrow, loss aversion

References

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Data Availability

The datasets used and/or analyzed during the current study will be available from the authors upon reasonable request.

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Volume Title
Proceedings of the 7th International Conference on Economic Management and Green Development
ISBN (Print)
978-1-83558-097-4
ISBN (Online)
978-1-83558-098-1
Published Date
10 November 2023
Series
Advances in Economics, Management and Political Sciences
ISSN (Print)
2754-1169
ISSN (Online)
2754-1177
DOI
10.54254/2754-1169/38/20231877
Copyright
© 2023 The Author(s)
Open Access
This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited

Copyright © 2023 EWA Publishing. Unless Otherwise Stated