2013 Conference

Financial Services

Financial Services

This study starts with the following research question: "Do households perceive being prepared for retirement rationally?” To answer this question, I will extend previous retirement adequacy studies to include the households' perception of being adequately prepared for retirement. This study will assess the projected retirement adequacy of U.S households having different perceptions of being adequately prepared for retirement. Moreover, various factors related to this perceived retirement adequacy will be analyzed.  Lastly, I will observe the trends of perceptions of adequate retirement during 1995-2010. The Survey of Consumer Finances (SCF) datasets from 1995 to 2010 will be used to test the empirical results. The dependent variable is defined as a dichotomous variable with a value equal to 1 if respondents are perceived as having an adequate retirement, otherwise the value is 0.  Logistic regression will be used for multivariate analysis. In order to calculate the projected retirement adequacy of households, I will use the capital accumulation ratio (CAR) as an indicator of retirement adequacy. Means test will be conducted to test differences between the projected (objective) retirement adequacy and their perceptions of being adequately prepared for retirement.