Financial Literacy, Incentives, and Innovation to Deal with Population Aging
By Charles Yuji Horioka and Yoko Niimi
One of the challenges that population aging poses is to ensure that people have an adequate level of saving for old age. While individuals are increasingly being asked to take more responsibility for their old-age saving, the evidence suggests that low levels of financial literacy are prevalent across the world and that the effectiveness of financial incentives that are offered to encourage people to enhance their retirement saving seems somewhat limited. We propose a number of policies that address these challenges with the aim of ensuring the financial wellbeing of the elderly in their retirement.