Age and Reactions to Financial Advice
How a person reacts to financial advice depends on age, according to a preliminary study conducted by The College of William & Mary’s Mason School of Business. Though fear is common motivator, young and older investors react differently when advice is given in abstract or concrete terms.
The researchers showed different sets of test advertisements to two focus groups to gauge their reactions. Each focus group encompassed approximately 750 people, split into “early workforce entrants” (ages 18–34) and “late workers” (ages 50–64).
The first group was surveyed to see how distance to retirement impacts behavior. The savings behavior for younger workers was influenced more by the time frame of the goal communicated in the ad, especially if the ad communicated a short- or long-term savings goal. Older workers, however, did not change their behavior when exposed to information on savings milestones. Researchers concluded that the further into the future retirement is, the greater the focus on abstract savings goals becomes.
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