The research reported in this paper was supported by grants from the University of Utah's Center on Aging and the University of Utah's Institute of Public and International Affairs. The authors also appreciate the help of Kara Glaubitz in the preparation of the revised manuscript.
Does Calculating Retirement Needs Boost Retirement Savings?
Article first published online: 3 JUN 2011
Copyright 2011 by The American Council on Consumer Interests
Journal of Consumer Affairs
Volume 45, Issue 2, pages 175–200, Summer 2011
How to Cite
MAYER, R. N., ZICK, C. D. and MARSDEN, M. (2011), Does Calculating Retirement Needs Boost Retirement Savings?. Journal of Consumer Affairs, 45: 175–200. doi: 10.1111/j.1745-6606.2011.01199.x
- Issue published online: 3 JUN 2011
- Article first published online: 3 JUN 2011
Calculating retirement savings needs is often viewed as an essential first step in retirement planning. Yet, little empirical evidence exists to support the value of this activity. This case study examines the connection between calculating retirement savings needs and retirement savings through analysis of an online survey of benefits-eligible employees at a large Mountain West university. Controlling for a variety of possible covariates, and using an instrumental variable approach, the case study shows that having estimated a retirement savings target increases self-reported retirement savings. The results provide support for financial educators and planners in their efforts to encourage people to estimate their retirement needs early in the retirement planning process.