Three Essays on Retirement Savings Decisions of American Adults
Saving for retirement is important because it helps ensure you have enough funds to support yourself throughout retirement. Savings in an employer-sponsored plan has significant tax benefits. Employees can save pre-tax dollars while working with an employer-sponsored plan like a 401(k)s or a 403(b). At retirement, employees are expected to be in a lower tax bracket and pay taxes on those dollars. Even though saving for retirement is vital in many ways, a significant number of U.S. households lack any form of retirement savings account. The following three essays examine American adults' participation in employer-sponsored retirement plans. Using the 2021 National Financial Capability Study (NFCS), the first essay examines the associations of employer-sponsored retirement plan participation with financial literacy and other explanatory variables and decomposes these associations into their explained and unexplained portions using the Oaxaca decomposition. Using the 2018 National Financial Capability Study (NFCS), the second essay examines the relationship between financial education and participation in employer-sponsored retirement plans, utilizing four different methods of financial education (1) financial education program participation, (2) financial education source, (3) financial education hours, (4) perceived quality of financial education. Using the 2021 National Financial Capability Study (NFCS), the third essay investigates the relationship between the act of figuring out one's retirement savings needs and actual retirement savings decisions in employer-sponsored retirement plans for younger individuals. The research aims to understand the gender gap in employer-sponsored retirement plan participation decisions. This research also helps understand the role of financial education and retirement need estimation in employer-sponsored retirement plan participation decisions.