CFP Board Picks 7 Best Retirement Research Papers of 2023

Notably, higher financial literacy has an “important moderating role” in relation to these two drivers and to income, while personality traits, such as conscientiousness and neuroticism, are also influential.

4. Tax Loss Harvesting: Check Your Frequency

David Blanchett authored this analysis, digging into the question of how taxes can affect optimal investment strategies for certain types of investors, including those planning for retirement. As Blanchett finds, efficiently considering taxes has the potential to meaningfully increase expected risk-adjusted after-tax returns.

One example of a relatively well-known strategy that has the potential to generate tax alpha is tax loss harvesting, Blanchett explains, which involves actively realizing losses on holdings where those losses can be used to offset taxes incurred (or due) on other investments.

Blanchett explores how harvesting frequency can shape the expected gains from implementing a realistic strategy, with an additional focus on the realized losses in different market return environments.

According to Blanchett, the analysis clearly demonstrates that more frequent harvesting schedules generate significantly higher levels of realized losses and that the losses realized are likely to vary materially across market return environments.

5. The Value of Professional Financial Advice in a Crisis

This paper, by four researchers at Griffith University, starts from the premise that the COVID-19 pandemic caused tremendous uncertainty for countries and households.

Given this disruption, the authors seek to provide insights into the value of professional financial advice for consumers during times of crisis, especially with respect to investors’ abilities to avoid making emotion-based decisions that harm their financial wellness and retirement prospects.

According to the authors, clients in long-term advisory relationships were reported to panic less in response to the pandemic than other crises, and they are more likely to have strategies in place to buffer stress.

Overall, the evidence highlights the clear value of trusted advisors in improving consumer well-being, from the start of the investing journey to the end of retirement.

6. A Comparative Study of Planners’ and Clients’ Perspectives on Value

Authored by three researchers at Kansas State University, this paper considers how the role of financial advisors is changing over time, especially with respect to the expansion of services beyond investment recommendations and into such fields as retirement planning. The authors also consider how clients’ and advisors’ perceptions of value compare and contrast.

As the authors emphasize, client satisfaction is a cornerstone of success in the financial planning industry, and traditionally, financial planning prioritized quantitative outcomes such as superior investment performance.

However, the authors find technological advances like robo-advice and artificial intelligence are compelling financial planners to reassess how they demonstrate value to clients. In turn, the role of financial planners is increasingly shifting from transactional agents to trusted counselors.

7. The Role of Financial Literacy in Improving Financial Well-Being

The authors of this analysis, who hail from Texas Tech University and Kansas State University, investigate the relationship between financial literacy and individuals’ financial well-being at different life stages, utilizing data from the 2022 Survey of Household Economics and Decision making, which is a cross-sectional survey released by the Federal Reserve Board.

As the authors explain, the paper employs an “ordered profit model” to find the relationship between financial literacy and an individual’s financial well-being.

The study affirms the positive affect of financial literacy on financial well-being. Specifically, individuals with a better understanding of inflation, higher education levels and full-time employment status are more likely to experience better financial well-being, including during retirement.

The authors say their work also provides compelling evidence supporting the importance of the promotion of financial literacy in enhancing individuals’ financial well-being, both on the part of policymakers and advisory professionals.