Do U.S. Households Perceive Their Retirement Preparedness Realistically?

29 Pages Posted: 18 Feb 2015 Last revised: 26 Jun 2015

See all articles by Kyoung Tae Kim

Kyoung Tae Kim

University of Alabama

Sherman D. Hanna

Ohio State University (OSU)

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

Kim, Kyoung Tae and Hanna, Sherman D., Do U.S. Households Perceive Their Retirement Preparedness Realistically? (February 15, 2015). Financial Services Review, 24, 139-155. Available at SSRN:

Kyoung Tae Kim (Contact Author)

University of Alabama ( email )

312 Adams Hall
Tuscaloosa, AL 35487-0001
United States

Sherman D. Hanna

Ohio State University (OSU) ( email )

1787 Neil Avenue
Campbell 265D
Columbus, OH 43210
United States
614-292-4584 (Phone)

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