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THE AIMS OF THE PAPER Studies have not explained fully how financial literacy, decision making skills and the diverse forms of financial literacy overconfidence interact with each other to explain households’ actual and perceived financial well-being at retirement. This study aims to map the interactions among these constructs within the elderly population. METHODOLOGY In the framework of a larger assessment on subjective well-being and its antecedents at retirement, three hundred retired people between the age of 65 and 85 filled out a questionnaire in their home in Hungary in March 2019. MOST IMPORTANT RESULTS Elderly people are overconfident in their financial literacy skills both on absolut and relative levels. Percieved financial literacy is a better predictor of financial situation than actual financial literacy. However, financial literacy overconficence relative to others harms elderly people’s financial situation. Subjective financial well-being is mainly driven by the actual financial situation. Decision making skills play an important role in the calibration of financial literacy skills and have an additional direct effect on the subjective level of financial well-being. Our outcomes reinforce that it is indeed worth promoting programs helping elderly people acquiring domain-specific financial knowledge. These programs may lead to better financial situation and higher self-efficacy. Moreover, our findings imply that it would be worthwhile for programs to concentrate on the calibration of financial knowledge vis-á-vis others. RECOMMENDATIONS To complement the mainstream literature, the study examines the forms of overconfidence and their effects on financial well-being separately and concentrates on the elderly population. Acknowledgements: The project was financed by the European Social Fund: Comprehensive Development for Implementing Smart Specialization Strategies at the University of Pecs (EFOP-3.6.1.- 16-2016-00004). Declarations of interest: none.

THE AIMS OF THE PAPER In this study, we investigate the impact of the low interest rate environment on the investment decisions. By formulating our research question, we wanted to know what kind of decision rule could describe the intertemporal preferences of decision makers in the low interest rate environment, if the traditional present value rule cannot explain the outcome of the decisions. METHODOLOGY To answer this research question we made a literature review and used numeric examples to introduce the rationally expected reaction of the decision makers. We also compared the intertemporal choices of decision makers who apply the traditional present value rule with those who have short-term preferences. During the research, we investigated the reactions of the decision makers mainly from a methodological point of view and we concentrated on the intertemporal preferences using the assumption that the reactions of the decision makers are motivated by the present value rule. We investigated the last decade after the crisis, because it is a distinct period, which enabled us to introduce the changes induced by the low interest rate environment. MOST IMPORTANT RESULTS By applying the traditional present value rule, we showed that the decrease of the discount rate stretches the time horizon of the investments and the increasing volatility of the present value provide space for speculation and for chase of returns. As the most important result of our research, we argue that in the cases when the traditional present value rule cannot explain the intertemporal preferences of decision makers we can apply quasi-hyperbolic discount functions, which can explain the decrease of investments and the increase of capital transfers. In the case of decision makers with short-term preferences the excess discounting leads to lower present values compared to the traditional present value rule, thus these decision makers can forgo valuable investment. RECOMMENDATIONS To answer our research question, we can draw the conclusion, that hyperbolic discounting and quasi-hyperbolic discount functions emerge as an alternative decision making framework of the intertemporal capital allocation decisions in contrast of the traditional present value rule in the low interest rate environment.