37 Pages Posted: 1 Jan 2013
Date Written: December 31, 2012
Most Americans have not estimated how much they need to save for retirement. This lack of awareness may contribute to low levels of retirement savings. We investigate the relation between planning and retirement wealth. Those who have estimated how much they need to save for retirement have significantly higher retirement wealth. Respondents who rely on an advisor to help plan for retirement save more than those who do it themselves and are more likely to own tax advantaged accounts. Advising services that did not involve estimation of retirement needs had no measurable value. Results suggest that planning, particularly with the help of a comprehensive advisor, improves retirement outcomes.
Keywords: financial planner, comprehensive financial advice, retirement savings, 2008 NLSY 79
JEL Classification: D14, H55, G11, J26
Suggested Citation: Suggested Citation