Reasoning Around Wealth Decumulation Choices for Adults Aged 50 Years and Older: The Role of Family Values

Abstract

Studies have shown that older people do not dissave and that they dissave slower than theoretically predicted. They also rarely use wealth decumulation products like annuities and reverse mortgages, despite the longevity insurance these provide. Most extant explanations characterized financial decumulation choices as rational, independent, and egocentric, overlooking the socioeconomic context and cultural values. The Confucian cultural heritage concerning family values may provide an alternative explanation and enrich the understanding of this phenomenon. Consequently, we explored how adults aged 50 years and older in Hong Kong reason about their financial decumulation choices, specifically with respect to four financial decumulation products: annuities, reverse mortgages, joint accounts, and wills. Focus groups and semi-structured interviews were used to collect data in this participatory qualitative study, conducted in partnership with older adults and law students. Sixty community-dwelling residents in Hong Kong ages 50–70 years participated in the study. The results show that wealth decumulation is largely influenced by relational and family values and is complicated by intersecting political, social, and cultural circumstances. The Confucianism-based, collectivist familism and filial piety underpinning Hong Kong society incline adults to adopt an attitude of self-restrain when making financial decumulation choices. Family morality values must be considered in the development of retirement products and retirement protection policies in contemporary Chinese society.