Does financial engagement really reduce financial anxiety in old age? Evidence from a developing country

Abstract

Understanding financial anxiety among older adults is increasingly important in developing countries, where formal retirement systems are often limited or absent. While financial engagement is promoted as a path to security, its psychological effects are underexplored. This study examines the link between financial engagement and financial anxiety in Bangladesh, a country experiencing rapid digital financial growth amid limited social protection. Using nationally representative data from the World Bank’s Global Findex 2022, we construct a financial engagement index based on six financial behaviors. Ordered logistic regression models show a positive and significant relationship between financial engagement and financial anxiety related to aging, medical costs, and education expenses. Contrary to expectations, more engaged individuals report greater financial anxiety, suggesting that engagement may increase awareness of financial risks. The findings highlight the need for inclusion strategies that combine access to financial education, digital literacy, and long-term planning support.