Abstract
Determining an appropriate and desirable income replacement rate is one of the keys to developing a successful personal financial
plan for retirement. In the present investigation, we examined workers’ expectations of the pre-retirement income they believed
would be necessary in order to have a “good” retirement relative to the income they anticipated they would receive. Analyses
revealed an expected income shortfall, the magnitude of which was positively related to one’s income and age. Sex was also
related to the magnitude of the expected shortfall, with women anticipating a larger financial discrepancy than men. Finally,
a sex by marital status interaction emerged in which single women were found to have a larger shortfall than single men and
married individuals of both sexes. Findings are discussed in terms of the importance of interventions aimed at educating workers
to understand the value of selecting a reasonable retirement income replacement rate.
plan for retirement. In the present investigation, we examined workers’ expectations of the pre-retirement income they believed
would be necessary in order to have a “good” retirement relative to the income they anticipated they would receive. Analyses
revealed an expected income shortfall, the magnitude of which was positively related to one’s income and age. Sex was also
related to the magnitude of the expected shortfall, with women anticipating a larger financial discrepancy than men. Finally,
a sex by marital status interaction emerged in which single women were found to have a larger shortfall than single men and
married individuals of both sexes. Findings are discussed in terms of the importance of interventions aimed at educating workers
to understand the value of selecting a reasonable retirement income replacement rate.
- Content Type Journal Article
- Category Original Paper
- Pages 1-9
- DOI 10.1007/s10834-012-9281-8
- Authors
- Douglas A. Hershey, Department of Psychology, Oklahoma State University, Stillwater, OK 74078, USA
- Joy M. Jacobs-Lawson, Graduate Center for Gerontology, University of Kentucky, 306 Wethington Health Sciences Bldg., 900 S. Limestone, Lexington, KY 40506, USA
- Journal Journal of Family and Economic Issues
- Online ISSN 1573-3475
- Print ISSN 1058-0476