Do U.S. Households Perceive Their Retirement Preparedness Realistically?
29 Pages Posted: 18 Feb 2015 Last revised: 26 Jun 2015
Date Written: February 15, 2015
This study examines the divergence between objective and subjective assessment of retirement adequacy, analyzing U.S. households with a full-time worker age 35 to 60 in the 2010 Survey of Consumer Finances. Of those households, 58% have objective inadequacy, and 54% have subjective inadequacy, but only 52% have objective/subjective consistency. Our focus is on households with objective inadequacy, and what factors were related to being an optimist despite having objective retirement inadequacy. A logistic regression shows that households with defined benefit plans and with defined contribution plans are less realistic than those without plans, and as age increases, realism decreases.
Keywords: Retirement assessment; Retirement adequacy; Cognitive ability; Survey of Consumer Finances (SCF); Financial education
JEL Classification: D12; D14; D91; J26
Suggested Citation: Suggested Citation