University-Provided Retirement Planning Support and Retiree Financial Satisfaction During Retirement: Differences By Gender, Job Classification, and Planning Behavior

29 Pages Posted: 14 Feb 2007

See all articles by Mark L. Power

Mark L. Power

Iowa State University - Department of Accounting and Finance

Tahira K. Hira

Iowa State University - Department of Human Development and Family Studies

Abstract

Sound financial planning and financial advice is necessary to achieve retirement income adequacy. The shift from defined benefit to defined contribution pension plans and the recent bankruptcy of Enron Corporation underscore the importance of managing retirement accumulation and liquidation risks. This study analyzes the effectiveness and adequacy of institutional-provided information and advice on employees' retirement planning decisions and their satisfaction with financial resources during retirement. Results suggest that retirement planning should begin earlier in an employee's career and that employer-provided retirement information and advice is a highly valued service. Gender, planning practices, job classification, and age are all significant predictors of satisfaction with financial resources during retirement. Targeting women and union employees with retirement information and advice that focuses on allocating contributions using a balanced portfolio approach should result in significant increases in satisfaction with financial resources during retirement. Regulatory objectives should focus on reducing retirement accumulation and liquidation risks, improving the delivery of professional financial advice to plan participants, and expanding qualified retirement plan choice for all labor force participants. To encourage employer participation in employee retirement planning, employers acting in "good faith" should be federally protected from liability for providing retirement planning information and advice to employees.

Suggested Citation

Power, Mark L. and Hira, Tahira K., University-Provided Retirement Planning Support and Retiree Financial Satisfaction During Retirement: Differences By Gender, Job Classification, and Planning Behavior. Risk Management & Insurance Review, Vol. 7, No. 2, pp. 121-149, September 2004. Available at SSRN: https://ssrn.com/abstract=962997 or http://dx.doi.org/10.1111/j.1098-1616.2004.00041.x

Mark L. Power (Contact Author)

Iowa State University - Department of Accounting and Finance ( email )

Carver Hall
Ames, IA 50011-2063
United States

Tahira K. Hira

Iowa State University - Department of Human Development and Family Studies ( email )

Ames, IA 50011-2035
United States
(515) 294-2042 (Phone)
(515) 294-0565 (Fax)

HOME PAGE: http://www.eng.iastate.edu/tkhira/

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