Noncognitive Determinants of Retirement Saving Behavior

Abstract This chapter explores how noncognitive skills like conscientiousness, stress resistance, and grit impact retirement readiness. Illustrated using survey data from Dutch households, the authors argue that traits like conscientiousness influence financial decisions related to savings, investments, and retirement. Individuals that possess these noncognitive skills show distinct financial behaviors, such as increased savings and financial wealth buffers. Furthermore, noncognitive abilities relate positively to the propensity to participate in the stock market. Finally, conscientious individuals are more likely to plan for retirement and desire more flexibility in their savings and investment decisions. This link between noncognitive skills and the desire is further supported by the finding that noncognitive ability relates positively with the propensity to opt out of the default pension plan.