Mean and pessimistic projections of retirement adequacy

Authors

  • Yoonkyung Yuh Won-building 6th floor, Yumri-dong, Mapo-ku, Seoul Korea (ROK)
  • Sherman Hanna Professor, Consumer and Textile Sciences Department, The Ohio State University, 1787 Neil Ave., Columbus, OH 43210-1295, USA
  • Catherine Phillips Montalto Assistant Professor, Consumer and Textile Sciences Department, The Ohio State University, 1787 Neil Ave., Columbus, OH 43210-1295, USA

DOI:

https://doi.org/10.1016/S1057-0810(99)00009-8

Abstract

Retirement adequacy is estimated using a 1995 United States sample of households. Based on mean lognormal portfolio projections and current contribution rates, 52% of households are adequately prepared for retirement. Based on pessimistic projections, only 42% of households are adequately prepared. A regression of the ratio of projected wealth to needs at retirement shows that adequacy increases with stock share (mean projection) and the impact increases with time until retirement. With pessimistic projections, there is no significant relationship between stock share and the adequacy ratio. Planned retirement age and household spending behavior are each significantly related to the adequacy ratio. © 1998 Elsevier Science Inc. All rights reserved.

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Published

1998-09-30

Issue

Vol. 7 No. 3 (1998): Financial Services Review

Section

New Original Submission

License

Copyright (c) 1998 JAI Press Inc.

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How to Cite

Mean and pessimistic projections of retirement adequacy. (1998). Financial Services Review, 7(3), 175–193. https://doi.org/10.1016/S1057-0810(99)00009-8