Which of the following is least likely to induce precautionary saving?
A) the decision to retire from work at age 62
B) the possibility of being laid-off from work
C) the uncertainty of one's lifetime
D) the risk of becoming ill
E) the prospect of a potentially large tax increase in the future

Question

Quizplus · Accepted Answer

Retiring at age 62 may induce some precautionary saving, but it may also provide the individual with more time to enjoy and spend their retirement savings. Therefore, it is the least likely option to induce precautionary saving compared to the other options (B, C, D, and E). Being laid-off (B) or facing the uncertainty of one's lifetime (C) may lead to saving for a rainy day. The risk of becoming ill (D) may also lead to precautionary saving for medical expenses. The prospect of a potentially large tax increase in the future (E) may induce individuals to save more in the present to offset the future tax burden.

Which of the Following Is Least Likely to Induce Precautionary