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Changes in retirement adequacy, 1995-2004: Accounting for retirement stages

Chen, Cheng-Chung
http://rave.ohiolink.edu/etdc/view?acc_num=osu1196285548

Abstract Details

2007, Doctor of Philosophy, Ohio State University, Family Resource Management.
Previous retirement adequacy studies have ignored retirement income stages in their research models. Studies that ignore retirement income stages result in biased estimations of retirement adequacy. In this study, retirement income stage is first being analyzed theoretically and then empirically. The effect of having retirement income stages on retirement adequacy is tested through two-sample t-tests and logistic regressions according to the theory of consumer psychology and bounded rationality.. In addition, the life cycle saving hypothesis and modern portfolio theories are used to project asset accumulation and distribution during retirement.. Retirement adequacy is measured by Palmer’s (1992, 1994) required retirement ratio concept with adjustments according to Maslow’s hierarchy-need theory. A retirement income stage is defined as a period in which the income source number is constant. Whenever the retirement income source number changes, one new stage is created. The income stage starts with planned retirement age and ends at the expected age of death of the individual or the couple. The maximum stage number for a married household is eight, based on the stage drivers of Social Security retirement benefit, Defined Benefit pension, and part-time job wage. The retirement adequacy indicator fluctuates across the retirement stages, while the method of previous studies concludes that retirement adequacy is constant across retirement life. The more stages a household has, the greater the difference of retirement adequacy between this new methodology and traditional methodology, i.e., ignoring stages. The overall adequacy proportion of new stage 1 ranges from 45.9% to 59.8%, while the adequacy proportion of new stage 2 ranges from 48.4% to 61.2%. It shows that the overall adequacy taking stages into account increased each survey period from 1995 to 2004. The combined stage adequacy proportion ranges from 47.2% to 60.5%. When ignoring stage partition, the adequacy proportion ranges from 58.0% to 61.7%. Compared these two methods, the adequacy proportion difference is about 11.7% in 1995, 8.4% in 1998, 3.8% in 2001, and 1.2% in 2004.
Sherman Hanna (Advisor)
162 p.
Economics, Finance
Retirement Income Stage; Retirement Planning; Saving; Pension; Social Security

Recommended Citations

Citations

  • Chen, C.-C. (2007). Changes in retirement adequacy, 1995-2004: Accounting for retirement stages [Doctoral dissertation, Ohio State University]. OhioLINK Electronic Theses and Dissertations Center. http://rave.ohiolink.edu/etdc/view?acc_num=osu1196285548

    APA Style (7th edition)

  • Chen, Cheng-Chung. Changes in retirement adequacy, 1995-2004: Accounting for retirement stages. 2007. Ohio State University, Doctoral dissertation. OhioLINK Electronic Theses and Dissertations Center, http://rave.ohiolink.edu/etdc/view?acc_num=osu1196285548.

    MLA Style (8th edition)

  • Chen, Cheng-Chung. "Changes in retirement adequacy, 1995-2004: Accounting for retirement stages." Doctoral dissertation, Ohio State University, 2007. http://rave.ohiolink.edu/etdc/view?acc_num=osu1196285548

    Chicago Manual of Style (17th edition)

osu1196285548
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This open access ETD is published by The Ohio State University and OhioLINK.