The quote above touches on two central and divergent aspects of individual financial planning behavior for retirement: The lack of motivation to engage in financial planning and the increasing responsibility of the individual for his1 financial situation in retirement. These observations triggered the author’s interest in researching individual retirement-specific financial planning behavior (FPB); encompassing both the perspectives an individual has on his financial situation in retirement and the specific financial planning actions this individual takes. The simultaneous investigation of these two aspects of individual retirement-specific FPB is becoming increasingly important in the academic world and in practical life as the relevance of financial provision for retirement is rising for the individual, companies, policy-makers, and for society as a whole.


Saving Rate Pension System Financial Situation Financial Planning Financial Planner 
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  1. 2.
    For detailed indications about the demographic developments in Germany refer to sub-chapter 3.1. Base data is originally provided by the German Statistical Federal Office as well as Pötzsch/Sommer 2003.Google Scholar
  2. 3.
    The peak of the German population is expected for the year 2012 with 83m individuals. Thereafter, the population is expected to shrink. See Stba 2003a.Google Scholar
  3. 4.
    The UNPD 2005 expects German migration to amount to 202,000 individuals annually, second only to the US. This corresponds to 2–3% of the population. In order to keep the working population constant until 2025, however, the net migration would have to be over 7%. See Reimann 2006, p. 18.Google Scholar
  4. 5.
    See WEF 2004, p. vi and xix.Google Scholar
  5. 6.
    See DIA 2006f, p. 1 and Biedenkopf 2005. According to AXA 2006b the average life-expectancy at birth was 49 years in 1889. See AXA 2006b, p. 4.Google Scholar
  6. 7.
    See WEF 2004, p. vii.Google Scholar
  7. 8.
    These measures, for example, include increasing the retirement age or raising immigration levels, encouraging reproduction or fostering the preferential inclusion of new “people pools” (e.g., groups that traditionally have had low workforce participation such as working-age women, younger retirees, and young adults). See WEF 2004, p. xvii.Google Scholar
  8. 9.
    Examples for these capital market related measures include using capital market innovations such as structuring of products with derivatives and debt securitization or a wider asset allocation choice for pension funds that allow for risk sharing and the development of new solutions with enhanced risk and return characteristics. See for example the presentation by Grünbichler 2004b, Shiller 2003 or the collection from Mitchell/Smetters 2003.Google Scholar
  9. 11.
    See Dychtwald 1999, Dychtwald et al. 2004, Frick 2005, Staib 2005 or Bernet 2005b.Google Scholar
  10. 12.
    Kroeber-Riel/Weinberg 1996 for example describe a trend to addicted shopping and consumption behavior that builds on an obsessive motivation to buy quickly but leads only to very short-term satisfaction feelings. It can be perceived in an unreasonable use of credit cards. See Kroeber-Riel/Weinberg 1996, p. 158f.Google Scholar
  11. 13.
    Today’s generation of retirees owns a significant share of the capital stock (in the US, today’s mature are controlling $7 trillion, about 70% of the total capital stock). See Dychtwald et al. 2004, p. 50. They will transfer a significant amount of this to the next generation, expected to be the largest “money in motion” transfer ever known. See Hunt et al. 2005. However, the next generation is expected to consume most of their assets due to their high consumption level and as they have to finance part of their retirement with their inheritance money. Therefore, they might leave a minimal amount as inheritance to their descendants, which accordingly have been termed “the Lost Generation”. See Bernet 2005b, p. 56ff and Bernet 2005a, p. 27f. For Germany, Braun et al. 2002 illustrate that 15.1m households (corresponding to 40% of all German households) will inherit assets of 8.1m households in the range of €2.0 trillion. They expect values of bequests to decrease starting from about 2020. See Braun et al. 2002, p. 3f.Google Scholar
  12. 15.
    See Gokhale et al. 1996, p. 1.Google Scholar
  13. 16.
    See Cotis et al. 2004, p. 21.Google Scholar
  14. 17.
    Partially induced by the negative wealth effect on the real estate markets, the latest numbers indicate an increase in the saving rate from −0.8% to −0.2% in August/September 2006. See Hofmann 2006, p. 2.Google Scholar
  15. 18.
    An asset meltdown stands for the effect that the value of certain assets is distorted due to demographic developments. This phenomenon was observed initially in the housing market where the demographic shifts led to significant distortions in prices. Prices rose substantially when a large share of the population was in their 20–30s, as in that period, the demand for housing is most pronounced, increasing only modestly until 40. Since the focus on accumulation of financial wealth is most accentuated between 40 and 64, prices of financial goods might be similarly affected as the generation of the baby boomers falls in that age category. See Borgmann 2005, p. 3ff and Bernet 2005a, p. 28. According to Börsch-Supan et al. 2003 the macroeconomic return in Europe will be reduced by 1% due to this asset meltdown effect if diversification is maintained. See Börsch-Supan et al. 2003, p. 4.Google Scholar
  16. 19.
    This research was conducted mostly in the context of 401 (k) plans as well as the introduction of private accounts in Sweden. See the collection from Mitchell/Utkus 2004b, Choi et al. 2002 or Cronqvist/Thaler 2004.Google Scholar
  17. 20.
    The SMarT plan is a concept for saving within DC plans defined by ThalerBenartzi 2004 in order to overcome shortcomings in the saving rate resulting from behavioral tendencies. The SMarT plan builds on four key elements that represent (re-)commitment devices: First, individuals are approached about committing savings with a time lag to the salary increase; second, the saving rate is increased for the first time with the pay raise; third, with every further pay raise, the saving rate is increased dynamically; fourth, all individuals have the option to opt out of the plan at any time. With these features it builds on the behavioral tendencies of lack of self-control, inertia, hyperbolic discounting and money illusion described in sub-chapter 4.2. Thaler/Benartzi 2004 found that participants who chose to join and stay in the plan had higher saving rates than everybody else, even those who did not contact the financial consultant and were (mostly) already saving a lot, or those to whom the financial consultant had suggested an individual, initially mostly higher, saving rate based on their needs. See Thaler/Benartzi 2004, p. 174.Google Scholar
  18. 21.
    See for example Börsch-Supan et al. 2004.Google Scholar
  19. 22.
    See Cronqvist/Thaler 2004. Other relevant research includes Palme et al. 2004 or Cronqvist 2003.Google Scholar
  20. 23.
    See for example Börsch-Supan/Wilke 2004, Börsch-Supan/Essig 2002, Börsch-Supan et al. 2003, Börsch-Supan et al. 2005.Google Scholar
  21. 24.
    The knowledge aim sets out the aim of the research as well as the expected research results. According to Bernet 1982, research aims can have a theoretical and a pragmatic part, both of which are closely linked and relevant to this study. While the theoretical part focuses on the description of the research object, its elements, structures and processes, and then integrates them in a cause-effect relationship, the pragmatic part seeks to transfer the knowledge gained into actionable recommendations and thus shape human reality. See Bernet 1982, p. 18ff.Google Scholar
  22. 25.
    This placement in empirical and application-oriented research determines the quality standards and exigencies for this research study. The term “empirical” — with its original Greek meaning “based on experience” — indicates that the systematic analysis of experiences is central to this study since generally acceptable results can be verified or falsified based on experience. See Bortz/Döring 2002, p. 7 and Stier 1996, p. 4ff. The quality of these generally acceptable results depends on their practical applicability and how well they can be used in actual decision processes. See Ulrich 1981, p. 4f, 10.Google Scholar

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