Anthony Asher

Financial literacy, financial judgement, and retirement self-efficacy of older trustees of self-managed superannuation funds

We investigate relationships between retirement self-efficacy, financial literacy and financial judgement across a sample of older trustees of self-managed superannuation funds (SMSFs). Aside from demographic factors, we explore self-rated dementia behaviours, general mental ability, mastery and risk tolerance. An increasing number of older people are controlling significant assets, particularly those who elect to become self-managed superannuation fund trustees. The ageing population, including self-managed superannuation fund trustees, is susceptible to cognitive decline with advancing age. We find that cognitive ability and self-rated behavioural dementia symptoms both relate to financial literacy. Variance in retirement self-efficacy was explained by age, cognitive ability, financial literacy, mastery and self-rated behavioural dementia symptoms. Those reporting dementia symptoms appear more vulnerable to making poor financial judgements. Findings have important implications for financial literacy interventions and the monitoring of on-going cognitive decline.

Life expectancy and cause of death in popular musicians: is the popular musician lifestyle the road to ruin?

Does a combination of lifestyle pressures and personality, as reflected in genre, lead to the early death of popular musicians? We explored overall mortality, cause of death, and changes in patterns of death over time and by music genre membership in popular musicians who died between 1950 and 2014. The death records of 13,195 popular musicians were coded for age and year of death, cause of death, gender, and music genre. Musician death statistics were compared with age-matched deaths in the US population using actuarial methods. Although the common perception is of a glamorous, free-wheeling lifestyle for this occupational group, the figures tell a very different story. Results showed that popular musicians have shortened life expectancy compared with comparable general populations. Results showed excess mortality from violent deaths (suicide, homicide, accidental death, including vehicular deaths and drug overdoses) and liver disease for each age group studied compared with population mortality patterns. These excess deaths were highest for the under-25-year age group and reduced chronologically thereafter. Overall mortality rates were twice as high compared with the population when averaged over the whole age range. Mortality impacts differed by music genre. In particular, excess suicides and liver-related disease were observed in country, metal, and rock musicians; excess homicides were observed in 6 of the 14 genres, in particular hip hop and rap musicians. For accidental death, actual deaths significantly exceeded expected deaths for country, folk, jazz, metal, pop, punk, and rock.

Age Pensioner Profiles: A Longitudinal Study of Income, Assets and Decumulation

Using eight years of data drawn from the records of Australia’s Centrelink agency, we describe the income, asset and decumulation patterns of over 10,000 age pensioners. Analysis of this longitudinal data set shows that age pensioners, on average, preserve both financial and residential wealth, consuming conservatively and, ultimately, passing on substantial bequests. While younger households do run down financial wealth early in retirement, older households generally maintain their assessable asset balances, and some even manage to save. The largest falls in assets are linked to changes in household structure due to death or the breakdown of a relationship. So, as in many other developed countries, age pensioners in Australia appear to ‘under-consume’, holding on to assets, and even building a buffer, well into their later years.

Age pensioner decumulation: Responses to incentives, uncertainty and family need:

Effective design and regulation of retirement benefits require accurate understanding of how the elderly decumulate. We analyse the income, assets and decumulation patterns of a longitudinal panel of 10,000 Australian age pensioners. On average, age pensioners preserve financial and residential wealth and leave substantial bequests. There is, however, considerable heterogeneity in decumulation patterns. Younger households generally run down financial wealth, while older households maintain their assets or save. Means-testing accelerates decumulation, with average drawdown rates 3% higher for pensioners subject to the income test relative to full pensioners and 9% higher for those subject to the asset test relative to full pensioners. Loss of a partner is linked to large falls in assets. The theoretical, empirical, and practical implications of these findings are discussed.

Equity in retirement: Are all Australians getting a fair deal?

This article evaluates the Australian retirement system using a framework of justice. Justice (alternatively, equity or fairness) is taken as requiring a full consideration of the criteria of needs, equality, liberty and just deserts, as well as matters of efficiency. Inequity occurs when the interests of weaker stakeholders are given inadequate consideration. Applying these criteria suggests that the Australian retirement system intrudes on the liberty of some groups of stakeholders inconsistently and inappropriately in mandating contributions at younger ages particularly, and by the imposition of unnecessarily bureaucratic means tests. It also fails to provide for the incapacitated older aged.

Gender differences in mortality and morbidity patterns in popular musicians across the lifespan

Recent studies have highlighted the disturbing morbidity and early mortality of popular musicians. Most of the studies have focused on male musicians because, until recently, there were relatively few female popular musicians on which to base a population study. With the sharp increase in female popular musicians from fewer than 2% in the 1950s to 32% in the current decade, researchers are better able to examine the health status and mortality profile of female popular musicians. To this end, this paper makes what we believe is the first detailed analysis of mortality and morbidity in female popular musicians. Mortality patterns were similar for male and female musicians, and both were highly discrepant from population curves. Examination of death rates for younger (<45 yrs) and older (>45 yrs) musicians by sex and genre showed that violent deaths continued to dominate cause of death even in older musicians, accounting for 20% of all deaths, a figure three times higher than for a comparable general population. Unlike females in the general population, female gender did not bestow any protection against early death or manner of death by suicide, homicide, or accident compared with male popular musicians.

Explicitly incorporating virtues into actuarial education

Abstract This paper outlines a framework for explicitly including ethics in actuarial education. The framework includes integrity, the cardinal virtues (justice, prudence, self-control and courage), and vocation. It is based on a traditional understanding of ethics, and it is argued that it has the potential to be widely acceptable. Justification, from philosophy, is found mainly in virtue ethics, and the work of Alasdair MacIntyre. The framework is concerned with matters of character as well as behaviour and ultimate outcomes (which are the respective concerns of apparently competing deontological and teleological theories). Integrity and the cardinal virtues can be found within current professional standards or, it is argued in the case of courage, should be there. We come to appreciate and display the virtues as we are inducted into a professional community by teachers and mentors. Our view of ethics is incomplete, however, without acknowledgement of our own weaknesses and failures, and an understanding of the role of regulation. Such understanding should include insight into the way in which ideologies and institutions can pervert ethics for the benefit of vested interests. Finally, suggestions are made as to how the framework of the virtues can be included in the actuarial syllabuses.

When Cognitive Functioning Meets Financial Literacy and Judgment in Older Age: Advising Those Self-Managing Retirement Savings

We investigate the relationships between measures of financial literacy, applied financial literacy, financial judgment and measures of fluid and crystallised cognitive ability. Given an ageing population and the responsibility for managing savings in retirement, this relationship is of increasing importance. We find differences between those people who self-manage large retirement savings portfolios and those with money in institutional retirement savings funds, with the former displaying greater financial literacy and judgment than is generally observed in members of institutional funds. We determine that different cognitive processes underlie financial literacy and financial judgment, and that these are susceptible to decline at different rates. Findings have important implications for the monitoring of cognitive ability, financial literacy and financial judgment over time.

Specifying Financial Calculators to Elicit Utility Preferences

Engagement: How to persuade people to spend enough time to capture essential issues, and to reflect on their risk preferences?Coherence: In the sense of logically consistent.Clarity: Limit confusion by eliminating unnecessary information.Efficiency: How to design calculators that are fast enough to give timeous feedback.

The Lifetime Harvesting Plan: Smoothed Annuities with Sharing of Mortality, and Averaging of Investment, Risks

This paper considers the design of pooled life annuities for Australian retirees. In particular it considers how mortality can be pooled, and investment returns smoothed, to provide for consumption that is greater and smoother – without the risk of totally exhausting account balances, and without the need for significant shareholder capital. It is also necessary to integrate payments with the age pension and to take regulatory minima into consideration. The results are illustrated for Australian returns since 1956.