The estimation of retirement savings needs and retirement analysis equations

Sharon Ann Burns, Purdue University

Abstract

Many basic research questions in the field of retirement savings analysis and retirement planning remain unanswered. Early research relied on assumptions that are, to some extent, nebulous and input variables in needs assessments have not been adequately tested. What is needed is an agreed upon, sound methodology for analyzing retirement needs, with associated, field tested input variables. This research attempts to apply and field test one method of retirement analysis. In addition, the results of analysis equations using various input factors are compared. Last, a test to determine which sociodemographic variables significantly influence the level of adjusted savings ratios and retirement planning behavior is conducted. For the study, a twenty-eight item survey mailed to employees of a large, midwestern university was used to obtain data about retirement expectations, net worth, and demographic factors. Univariate and multivariate statistical procedures were applied to data on retirement needs, to answer the research questions. Results indicate that the proposed method of retirement analysis provides meaningful insights into respondents' retirement needs. Varying values of input factors when calculating adjusted savings ratios results in significantly different adjusted savings ratios. Members of different income groups have significantly different mean savings ratios. Income, marital status, occupation, age and debt load were good predictors of adjusted savings ratios resulting from multiple regression equations employing standard values. Expected retirement age and occupation are good predictors when expectations are included in the calculations.

Degree

Ph.D.

Advisors

Widdows, Purdue University.

Subject Area

Home economics education|Finance

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