Personality Traits and Economic Preparation for Retirement

Published: 2012


This paper assesses the effects of personality traits on economic preparation for retirement, wealth accumulation, and consumption, among persons 66 to 69 years of age. Among the five chief personality traits of neuroticism, extroversion, agreeableness, conscientiousness, and openness, we focus most on conscientiousness. We find levels of adequate economic preparation for retirement ranging  from 29 percent to 90 percent and that conscientiousness positively affects the proportion of persons adequately prepared for retirement, while neuroticism negatively affects it. Both consumption and wealth increase with conscientiousness but wealth increases faster, indicating that more conscientious persons save more out of retirement resources.

Key Findings

    • Personality traits operate through economic resources and consumption levels and impact one’s adequacy of preparation for retirement.
    • Individuals with higher levels of conscientiousness are more likely to be economically prepared for retirement, because of greater earnings and high saving.
    • Neuroticism negatively affects wealth among married persons, particularly females, while conscientiousness positively affects wealth among both males and females, and openness positively affects wealth among females.
    • Among single persons, and in contrast to our findings among married persons and the overall sample, conscientiousness does not predict economic preparation for retirement.
    • Neuroticism negatively affects preparation for retirement among both single males and single females, while extroversion negatively affects preparation for retirement among single males.