What is it about?
Nearly 45 million workers in the United States have no access to employer-based retirement plans because they work for employers that do not offer retirement plans. These workers rely on individual retirement accounts for their retirement savings. Our research investigated how attitudes, norms, and a sense of control affect both the intention to own individual retirement accounts and the actual ownership of individual retirement accounts.
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Why is it important?
Nearly 45 million workers in the United States have no access to employer-based retirement plans because they work for employers that do not offer retirement plans. We found that favorable attitudes, strong social norms, and a sense of control influence the intention to own individual retirement accounts. In turn, the intention to own individual retirement accounts, having an employer-based retirement plan, as well as a sense of control influenced the actual ownership of individual retirement accounts. The findings from our research provide personal finance educators and financial advisors with knowledge of the factors that influence ownership of individual retirement accounts. They can use this knowledge to encourage individuals who do not have access to employer-based retirement plans to prepare for retirement through ownership of individual retirement accounts.
Perspectives
Most American workers report low confidence in their ability to retire comfortably. Ownership of individual retirement accounts and balances in these accounts influence this confidence. Our study shows possible factors that can be targeted for interventions that aim to aim to increase ownership of individual retirement accounts which in turn could increase retirement confidence among American workers.
DR FRANK MAGWEGWE
University of Pretoria
Read the Original
This page is a summary of: Factors Associated With the Ownership of Individual Retirement Accounts (IRAs): Applying the Theory of Planned Behavior, Journal of Financial Counseling and Planning, December 2020, Springer Publishing Company,
DOI: 10.1891/jfcp-19-00023.
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