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

ABSTRACT

This study investigated the effect of underconfidence in one’s financial capability on individual financial satisfaction among U.S. adults using the 2021 National Financial Capability Study. The findings showed that the association between underconfidence and financial satisfaction was partially mediated by passive retirement planning behaviors. Underconfident individuals were less likely to engage in retirement planning behaviors, and in turn experienced less financial satisfaction. Moreover, men and highly educated individuals reflected more negative consequences from low confidence. These results suggest that financial education focused on both improving financial knowledge and strengthening financial self-efficacy can better support confident engagement in retirement planning, particularly among those who appear financially capable on paper but feel uncertain about their abilities.