Title: A Little Help: The Impact of On-Line Calculators and Financial Advisors on Setting Adequate Retirement-Savings Targets: Evidence from the 2013 Retirement Confidence Survey
Abstract: For nearly a quarter century, the Retirement Confidence Survey (RCS) has garnered a sense of American worker and retiree confidence about their financial prospects in retirement. This paper presents an analysis of the retirement savings targets set by individual respondents to the 2013 RCS, coupled with the EBRI Retirement Security Projection Model® (RSPM), and provides an assessment of how various household behaviors/beliefs are associated with the adequacy of retirement savings targets, as indicated by the modified Retirement Readiness Rating® (RRR) values. It finds that both the use of on-line calculators and seeking the advice of financial advisors result in estimated savings targets that not only increase the estimated probability of retirement income adequacy, but also result in double-digit percentage-point increases for many of the groups when analyzed by relative income quartiles and family/gender combinations. Those using an on-line calculator or asking a financial advisor appear to set more adequate savings targets, as measured by the probability of not running short of money in retirement. Those in the lowest-income quartile show a 9.1-12.6 percentage point improvement (depending on family/gender) in the probability of not running short of money in retirement if a financial advisor has been asked, and a 14.6-18.2 percentage point increase if an on-line calculator is used. On the other hand, those who “guessed” at those targets tended to underestimate their savings needs, as did the subset in this sampling that were somewhat or very confident in their prospects. The PDF for the above title, published in the March 2013 issue of EBRI Notes, also contains the fulltext of another March 2013 EBRI Notes article abstracted on SSRN: “’Post’ Script: What’s Next for Employment-Based Health Benefits?”
Publication Year: 2013
Publication Date: 2013-03-01
Language: en
Type: article
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Cited By Count: 9
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