Academic journal article The Journal of Consumer Affairs

Intrinsic Rewards of Work, Future Time Perspective, the Economy in the Future and Retirement Planning

Academic journal article The Journal of Consumer Affairs

Intrinsic Rewards of Work, Future Time Perspective, the Economy in the Future and Retirement Planning

Article excerpt

This study incorporated intrinsic rewards of work, future time perspective and perspective on the economy in the future to create a model for the psychological mechanism of planning for retirement. The data set included those who were not retired (N = 2,266) in the 1992 Health and Retirement Study. Confirmatory factor analyses and structural equation modeling were used. The analyses were conducted separately on the different types of retirement plans. The results suggest that human resource professionals should (1) encourage employees who perceive high intrinsic rewards of work to plan for their retirement, and (2) remind employees that retirement might be closer than they anticipate.


The concept of retirement developed following the Industrial Revolution; now retirement is widely accepted. Currently, the time individuals spend in school or pre-work training has increased due to the complexity and demands of work. At the same time, the number of years spent in retirement is increasing because of advances in medical services. As a result, individuals have relatively less time during their work life to save for their retirement years (Dalton 2008). Therefore, the importance of retirement planning has greatly increased but there appears to be a lack of planning for retirement. About 40% of workers in their 50s reported that they did not have a plan for retirement or they had not thought much about it (Ekerdt, DeViney, and Kosloski 1996, 160). About 60% of older self-employed workers did not have a retirement plan (DeVaney and Kim 2003). Only 13% of workers interviewed for the 2009 Retirement Confidence Survey reported being "very confident" about having enough money for retirement. This was the lowest rate since the survey asked this question in 1993 (Helman et al. 2009).

The relationship between retirement and poverty has been explored (Holden, Burkhauser, and Feaster 1988). By using the Retirement History Study, they found that the initial decline into poverty for older couples was linked to the event of the husband's retirement. This result showed that when the household lost the husband's regular income, they were financially vulnerable if they had not saved in advance of retirement. Based on twenty-five waves of the Panel Study of Income Dynamics, Rank and Hirschl (1999) found that 40% of America's elderly population will encounter a year below the poverty line between ages sixty and ninety. The relationship between retirement and poverty was also mentioned in Reducing Poverty in Older Women (Townson 2000); the study suggested that women were more likely than men to face financial difficulties after retirement.

Besides those who were near the poverty line, Mitchell and Moore (1998) concluded that a married couple about 55 years old with $400,000 assets would still need to engage in substantial savings in order to retire comfortably. If the pre-retirees were not saving enough to enable them to retire, they were likely to face financial difficulty in retirement years. For those who are less fortunate and below the poverty level, the government would need to devote resources to them to ensure their welfare. According to Christine Weller of the Economic Policy Institute, the average American household does not hold adequate retirement savings (Dugas 2002). Munnell, Webb, and Delorme (2006) stated that more than 40% of American households are "at risk" of declines in retirement income.

Factors associated with planning for retirement have been investigated by many researchers (i.e., Adams and Beehr 1998; Beehr et al. 2000; Ekerdt and DeViney 1993; Ekerdt et al. 2001; Kim and DeVaney 2005). The primary focus of these studies has been financial preparation for retirement. Recently, researchers have considered the psychological aspects of retirement planning. The concept of future time perspective has been addressed in several studies (Hershey et al. 2007; Hershey and Mowen 2000; Jacobs-Lawson and Hershey 2005). …

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