Skip to main content
Have a personal or library account? Click to login
The Role of Underconfidence in Retirement Planning and Financial Satisfaction in the United States: A Mediation and Multigroup Analysis Cover

The Role of Underconfidence in Retirement Planning and Financial Satisfaction in the United States: A Mediation and Multigroup Analysis

Open Access
|Jun 2026

References

  1. Adam, A. M., Frimpong, S., & Boadu, M. O. (2017). Financial literacy and financial planning: Implication for financial well-being of retirees. Business and Economic Horizons, 13(4), 613–625.
  2. Ahmad, M. (2021). Does underconfidence matter in short-term and long-term investment decisions? Evidence from an emerging market. Management Decision, 59(3), 692–709. https://doi.org/10.1108/MD-07-2019-0972
  3. Allgood, S., & Walstad, W. B. (2016). The effects of perceived and actual financial literacy on financial behaviors. Economic Inquiry, 54(1), 675–697. https://doi.org/10.1111/ecin.12255
  4. Anderson, A., Baker, F., & Robinson, D. T. (2017). Precautionary savings, retirement planning and misperceptions of financial literacy. Journal of Financial Economics, 126(2), 383-398. https://doi.org/10.1016/j.jfineco.2017.07.008
  5. Angrisani, M., & Casanova, M. (2021). What you think you know can hurt you: Under/over confidence in financial knowledge and preparedness for retirement. Journal of Pension Economics & Finance, 20(4), 516–531. https://doi.org/10.1017/S1474747219000131
  6. Archuleta, K. L., Britt, S. L., Tonn, T. J., & Grable, J. E. (2011). Financial satisfaction and financial stressors in marital satisfaction. Psychological Reports, 108(2), 563-576.
  7. Atlas, S. A., Lu, J., Micu, P. D., & Porto, N. (2019). Financial knowledge, confidence, credit use, and financial satisfaction. Journal of Financial Counseling and Planning, 30(2), 175–190. https://doi.org/10.1891/1052-3073.30.2.175
  8. Bandura, A. (1977). Self-efficacy: Toward a unifying theory of behavioral change. Psychological Review, 84(2), 191–215.
  9. Bandura, A. (1994). Self-efficacy. In V. S. Ramachaudran (Ed.), Encyclopedia of human behavior (Vol. 4, pp. 71–81). Academic Press.
  10. Bandura, A. (1997). Self-efficacy: The exercise of control. W. H. Freeman.
  11. Bandura, A. (1999). Social cognitive theory: An agentic perspective. Asian Journal of Social Psychology, 2(1), 21–41.
  12. Bandura, A. (2006). Toward a psychology of human agency. Perspectives on Psychological Science, 1(2), 164–180.
  13. Bannier, C. E., & Schwarz, M. (2018). Gender-and education-related effects of financial literacy and confidence on financial wealth. Journal of Economic Psychology, 67, 66-86.
  14. Barber, B. M., & Odean T. (2001). Boys will be boys: Gender, overconfidence, and common stock investment. The Quarterly Journal of Economics, 116(1), 261–292. https://doi.org/10.1162/003355301556400
  15. Barrafrem, K., Västfjäll, D., & Tinghög, G. (2020). Financial well-being, COVID-19, and the financial better-than-average-effect. Journal of Behavioral and Experimental Finance, 28, 100410. https://doi.org/10.1016/j.jbef.2020.100410
  16. Benartzi, S., & Thaler, R. H. (2007). Heuristics and biases in retirement savings behavior. Journal of Economic Perspectives, 21(3), 81–104. https://doi.org/10.1257/jep.21.3.81
  17. Bialowolski, P., Weziak-Bialowolska, D., & Cwynar, A. (2025). Reassessing the role of financial knowledge and confidence for financial outcomes across income groups in the EU. Kyklos, 78(4), 1424–1439. https://doi.org/10.1111/kykl.12477
  18. Collins, J. M., & O’Rourke, C. M. (2010). Financial education and counseling—Still holding promise. Journal of Consumer Affairs, 44(3), 483–498. https://doi.org/10.1111/j.1745-6606.2010.01179.x
  19. Courtenay, W. H. (2000). Constructions of masculinity and their influence on men’s well-being: A theory of gender and health. Social Science & Medicine, 50(10), 1385–1401. https://doi.org/10.1016/S0277-9536(99)00390-1
  20. Chen, F., & Chen, J. (2023). Financial literacy confidence and retirement planning: Evidence from China. Risks, 11(2), 46. https://doi.org/10.3390/risks11020046
  21. Dare, S. E., van Dijk, W. W., van Dijk, E., van Dillen, L. F., Gallucci, M., & Simonse, O. (2020). The road to financial satisfaction: Testing the paths of knowledge, attitudes, sense of control, and positive financial behaviors. Journal of Financial Therapy, 11(2), e2.
  22. Eagly, A. H., & Wood, W. (2012). Social role theory. In P. A. M. Van Lange, A. W. Kruglanski, & E. T. Higgins (Eds.), Handbook of Theories of Social Psychology (Vol. 2, pp. 458–476). Sage.
  23. Fachrudin, K. A., Pirzada, K., & Iman, M. F. (2022). The role of financial behavior in mediating the influence of socioeconomic characteristics and neurotic personality traits on financial satisfaction. Cogent Business & Management, 9(1), 2080152. https://doi.org/10.1080/23311975.2022.2080152
  24. Farrell, L., Fry, T. R. L., & Risse, L. (2016). The significance of financial self-efficacy in explaining women’s personal finance behaviour. Journal of Economic Psychology, 54, 85–99. https://doi.org/10.1016/j.joep.2015.07.001
  25. Fonseca, R., Mullen, K. J., Zamarro, G., & Zissimopoulos, J. (2012). What explains the gender gap in financial literacy? The role of household decision making. Journal of Consumer Affairs, 46(1), 90–106. https://doi.org/10.1111/j.1745-6606.2011.01221.x
  26. Forbes, J., & Kara, S. M. (2010). Confidence mediates how investment knowledge influences investing self-efficacy. Journal of Economic Psychology, 31(3), 435–443. https://doi.org/10.1016/j.joep.2010.01.012
  27. French, D., & Vigne, S. (2019). The causes and consequences of household financial strain: A systematic review. International Review of Financial Analysis, 62, 150-156. https://doi.org/10.1016/j.irfa.2018.09.008
  28. Gilovich, T., & Medvec, V. H. (1994). The temporal pattern to the experience of regret. Journal of Personality and Social Psychology, 67(3), 357–365. https://doi.org/10.1037/0022-3514.67.3.357
  29. Gist, M. E., & Mitchell, T. R. (1992). Self-efficacy: A theoretical analysis of its determinants and malleability. Academy of Management review, 17(2), 183-211. https://doi.org/10.5465/amr.1992.4279530
  30. Heo, W., Rabbani, A. G., & Lee, J. M. (2021). Mediation between financial risk tolerance and equity ownership: Assessing the role of financial knowledge underconfidence. Journal of Financial Services Marketing, 26(3), 169–180. https://doi.org/10.1057/s41264-021-00088-y
  31. Joo, S. H., & Grable, J. E. (2004). An exploratory framework of the determinants of financial satisfaction. Journal of family and economic Issues, 25(1), 25-50. https://doi.org/10.1023/B:JEEI.0000016722.37994.9f
  32. Jouini, E., Karehnke, P., & Napp, C. (2018). Stereotypes, underconfidence and decision-making with an application to gender and math. Journal of Economic Behavior & Organization, 148, 34-45. https://doi.org/10.1016/jjebo.2018.02.003
  33. Kaiser, T., & Menkhoff, L. (2017). Does financial education impact financial literacy and financial behavior, and if so, when? The World Bank Economic Review, 31(3), 611–630. https://doi.org/10.1093/wber/lhx018
  34. Kaiser, T., & Menkhoff, L. (2021). Financial education measures are effective: Germany should develop a national strategy for financial education. DIW Weekly Report, 11(38), 287–294. https://doi.org/10.18723/diw_dwr:2021-38-1
  35. Kidwell, B., Hasford, J., Turner, B., Hardesty, D. M., & Zablah, A. R. (2021). Emotional calibration and salesperson performance. Journal of Marketing, 85(6), 141-161. https://doi.org/10.1177/0022242921999603
  36. Kim, K. T., Anderson, S. G., & Seay, M. C. (2019). Financial knowledge and short-term and long-term financial behaviors of millennials in the United States. Journal of Family and Economic Issues, 40(2), 194–208. https://doi.org/10.1007/s10834-018-9595-2
  37. Kruger, J., & Dunning, D. (1999). Unskilled and unaware of it: How difficulties in recognizing one's own incompetence lead to inflated self-assessments. Journal of Personality and Social Psychology, 77(6), 1121–1134. https://doi.org/10.1037/0022-3514.77.6.1121
  38. Lewis, S., & Messy, F. (2012). Financial education, savings and investments: An overview (OECD Working Papers on Finance, Insurance and Private Pensions, No. 22). OECD Publishing. https://doi.org/10.1787/5k94gxrw760v-en
  39. Lind, T., Ahmed, A., Skagerlund, K., Strömbäck, C., Västfjäll, D., & Tinghög, G. (2020). Competence, confidence, and gender: The role of objective and subjective financial knowledge in household finance. Journal of Family and Economic Issues, 41(4), 626–638. https://doi.org/10.1007/s10834-020-09678-9
  40. Lusardi, A., & Mitchell, O. S. (2014). The economic importance of financial literacy: Theory and evidence. Journal of Economic Literature, 52(1), 5–44. https://doi.org/10.1257/jel.52.1.5
  41. Noone, J., Alpass, F., & Stephens, C. (2010). Do men and women differ in their retirement planning? Testing a theoretical model of gendered pathways to retirement preparation. Research on aging, 32(6), 715-738. https://doi.org/10.1177/0164027510383531
  42. Nolan, A., & Doorley, K. (2019). Financial literacy and preparation for retirement (IZA Discussion Paper No. 12187). Institute of Labor Economics (IZA). SSRN. https://ssrn.com/abstract=3390174
  43. Owusu, G. M. Y. (2023). Predictors of financial satisfaction and its impact on psychological wellbeing of individuals. Journal of Humanities and Applied Social Sciences, 5(1), 59–76. https://doi.org/10.1108/jhass-05-2021-0101
  44. Prawitz, A., Garman, E. T., Sorhaindo, B., O'Neill, B., Kim, J., & Drentea, P. (2006). InCharge financial distress/financial well-being scale: Development, administration, and score interpretation. Journal of Financial Counseling and Planning, 17(1), 34–50.
  45. Pearson, B., & Korankye, T. (2023). The association between financial literacy confidence and financial satisfaction. Review of Behavioral Finance, 15(6), 935-946. https://doi.org/10.1108/RBF-03-2022-0090
  46. Pearson, B., Korankye, T., & Liu, Y. (2024). Retirement planning, retirement insecurity, and financial satisfaction. Journal of Retirement, 11(3), 40–52. https://doi.org/10.3905/jor.2023.1.145
  47. Peters, E., Tompkins, M. K., Knoll, M. A., Ardoin, S. P., Shoots-Reinhard, B., & Meara, A. S. (2019). Despite high objective numeracy, lower numeric confidence relates to worse financial and medical outcomes. Proceedings of the National Academy of Sciences, 116(39), 19386–19391. https://doi.org/10.1073/pnas.1903126116
  48. Preacher, K. J., & Hayes, A. F. (2008). Assessing mediation in communication research. In A. F. Hayes, M. D. Slater, & L. B. Snyder (Eds.), The Sage sourcebook of advanced data analysis methods for communication research (pp. 13–54). Sage. https://doi.org/10.4135/9781452272054
  49. Shrauger, J. S., & Schohn, M. (1995). Self-confidence in college students: Conceptualization, measurement, and behavioral implications. Assessment, 2(3), 255–278. https://doi.org/10.1177/1073191195002003006
  50. Tahir, M. S., Shahid, A. U., & Richards, D. W. (2022). The role of impulsivity and financial satisfaction in a moderated mediation model of consumer financial resilience and life satisfaction. International Journal of Bank Marketing, 40(4), 773-790. DOI 10.1108/IJBM-09-2021-0407
  51. Tahir, M. S., Abdulgafor, S. C., & Kumar, S. (2026). What we know and what we should know about financial satisfaction: a systematic literature review and future research agenda. Qualitative Research in Financial Markets, 18(2), 476-518. https://doi.org/10.1108/qrfm-02-2024-0047
  52. Van Rooij, M. C., Lusardi, A., & Alessie, R. J. (2012). Financial literacy, retirement planning and household wealth. The Economic Journal, 122(560), 449–478. https://doi.org/10.1111/j.1468-0297.2012.02501.x
  53. Wagner, J. (2019). Financial education and financial literacy by income and education groups. Journal of Financial Counseling and Planning, 30(1), 132–141. https://doi.org/10.1891/1052-3073.30.1.132
  54. Xiao, J. J., Tang, C., & Shim, S. (2009). Acting for happiness: Financial behavior and life satisfaction of college students. Social Indicators Research, 92(1), 53-68. https://doi.org/10.1007/s11205-008-9288-6
  55. Xiao, J. J., Chen, C., & Chen, F. (2014). Consumer financial capability and financial satisfaction. Social Indicators Research, 118(1), 415–432. https://doi.org/10.1007/s11205-013-0414-8
  56. Xiao, J. J., & O’Neill, B. (2018). Propensity to plan, financial capability, and financial satisfaction. International Journal of Consumer Studies, 42(5), 501–512. https://doi.org/10.1111/ijcs.12461
  57. Yeh, T. M., & Ling, Y. (2022). Confidence in financial literacy, stock market participation, and retirement planning. Journal of Family and Economic Issues, 43(1), 169–186. https://doi.org/10.1007/s10834-021-09769-1
  58. Zimmerman, S. (1995). Understanding family policy: Theories and applications. Sage.
DOI: https://doi.org/10.2478/irfc-2026-0002 | Journal eISSN: 2508-464X | Journal ISSN: 2508-3155
Language: English
Page range: 15 - 31
Published on: Jun 30, 2026
In partnership with: Paradigm Publishing Services

© 2026 Mengya Wang, Suzanne Bartholomae, Jonathan Fox, published by International Academy of Financial Consumers
This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.