NC State Economics Professor Clark Received $2 Million Grant to Study Americans’ Financial Health in Retirement
For Immediate Release
September 26, 2019
Contact: Monty Hagler
RALEIGH, N.C. – The Institute of Consumer Money Management (ICMM), a North Carolina-based nonprofit, today announced a $2 million grant to three leading universities for studying the financial health of Low and Moderate Income (LMI) Americans who are near or in retirement. The grant is a key initiative of ICMM’s mission of creating a sustainable financial future for consumers.
Dr. Robert Clark of North Carolina State University, Dr. Annamaria Lusardi of the George Washington University and Dr. Olivia S. Mitchell of the Wharton School of the University of Pennsylvania are the grant recipients. All three scholars are nationally and internationally recognized for their innovative research into the economic well-being of older individuals, retirement decisions, pensions and health insurance and the impact of financial literacy on LMI decision making and well-being. They will work collaboratively over a four-year period as the principal investigators on this comprehensive and innovative study.
“A major issue in the United States is the economic well-being of LMI Americans in retirement,” said Diane Chen, executive director of ICMM. “Increases in life expectancy, changes in pensions and shifts in government programs mean that individuals must now plan for their retirements and become better managers of their assets and debts. The aging of the population and the hollowing out of the middle class also imply that there will be more households facing these challenges in the future.”
The ambitious research program includes seven linked components that together will examine the ability of LMI households to finance and sustain retirement well-being. It will combine the best existing data with new data designed to focus on the LMI population broadly and the African-American segment in particular. The research will probe the effectiveness of financial knowledge in translating savings into retirement well-being.
“The Poole College has a long history of examining important economic and policy issues associated with individual and population aging and the economic well-being of retirees,” said Robert Clark, Professor, Poole College of Management and Principal Investigator for the ICMM Grant. “The grant from ICMM will provide support that will allow this research to continue. A key element of this research is its focus on understanding the changes in the standard of living of low- and moderate-income families as they enter retirement and whether income declines can be moderated by specific programs such as financial literacy initiatives.”
“The changing economic landscape means we need to better understand how the transition from work to retirement affects the retirement well-being of LMI households,” said Annamaria Lusardi, Academic Director of the Global Financial Literacy Excellence Center at the GW School of Business. “Moreover, we need to better understand how financial literacy and low levels of financial knowledge impacts the financial decisions of LMI households. There is a lot at stake, including the inability of people to retire and/or enjoy a comfortable retirement.”
“Older Americans make many decisions on the cusp of retirement that can lead to poor outcomes in later life. Our work will examine the factors predictive of how people end up with relatively low incomes in retirement including retirement decisions, saving and investment patterns, and financial literacy,” stated Olivia S. Mitchell, Director of the Pension Research Council at the Wharton School of the University of Pennsylvania.
At the end of the grant cycle, ICMM and the researchers will host a capstone conference to present findings, policy recommendations and suggestions for interventions. ICMM and the principal investigators intend to invite other scholars and practitioners to present their work in the field of LMI retirees’ financial well-being at this conference.
For more information about ICMM and the three principal investigators, please go to www.icmmnc.org, and the three principal investigators’ information on their home universities’ web pages.