Personality Traits and Defined Contribution Plan Participation Among Older Americans

~ Vail ~

Retirement preparedness continues to be elusive for Americans. Individuals expect less funding and lower wage-replacement from pensions and social security. This environment reinforces the emphasis on higher participation rates in individual savings mechanisms, such as defined contribution plans and Individual Retirement Accounts. Studies show that DC plan design tools such as automatic enrollment tend to increase plan participation; however, low participation rates across voluntary DC plan plans and IRAs persist. This paper contributes to the existing literature by investigating whether the Five-Factor Model personality traits could partially explain DC plan participation.