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- Creators: Anand, Rohan
- Creators: School of Mathematical and Statistical Sciences
- Creators: DeSantangilo, Nicholas Charles
Through research, interviews, and analysis, our paper provides the local community with a resource that offers a comprehensive collection of insight into the Mirabella at ASU Life Plan Community and the projected impact it will have on the City of Tempe and Arizona State University.
Through research, interviews, and analysis, our paper provides the local community with a resource that offers a comprehensive collection of insight into the Mirabella at ASU Life Plan Community and the projected impact it will have on the City of Tempe and Arizona State University.
Through research, interviews, and analysis, our paper provides the local community with a resource that offers a comprehensive collection of insight into the Mirabella at ASU Life Plan Community and the projected impact it will have on the City of Tempe and Arizona State University.
• Are current college undergraduates interested in the idea of saving for retirement?
• Do they have realistic expectations about how much money they need to save in order to live comfortably during retirement?
• Are there differences in expectations between people who are interested in saving for retirement using traditional means and people who are interested in saving for retirement using the extreme-saving FIRE (Financial Independence Retire Early) method?
This paper examines students’ interest in the idea of saving for retirement through a series of lenses: demographics, financial retirement literacy, and expressed commitment to save for retirement. I hypothesized that traditional retirement expected savers and FIRE expected savers, who correctly answer financial retirement literacy questions, are realistic about how much money they will need to save in order to live comfortably during retirement. To investigate this, a survey was sent out to two ASU Tempe campus business classes; 171 completed responses were analyzed. The statistical analysis of the unfiltered survey results showed three findings, but one finding stood out the most: Students who know what a 401k is (Question 5 in Exhibit 1) are significantly more likely to plan on saving for retirement, when compared to students who don’t know what a 401k is.
When filtering survey results to only show responses from students who know what a 401k is, median responses show that traditional retirement expected savers are somewhat realistic with their retirement savings expectations, while FIRE expected savers are not realistic with their retirement savings expectations.
Of the many retirement savings options available, defined benefit pension plans were once a retirement income staple. Due to the highs and lows of the economic cycle, defined benefit pension plans have become severely underfunded. A series of inadequate contributions, enabled by weak funding and risk management policies, poses uncertainty for the retirement of many. The cost of paying pension benefits rises as defined benefit pension plans become increasingly underfunded, burdening the employers who continue to pay them. However, without increasing these already unaffordable pension benefits alongside inflation, they become less valuable to retirees. As pension benefits lose their value and the costs of retirement, such as healthcare and assisted living, increase, defined benefit pension plans may not provide the retirement security that was once promised.