Microsoft Word Ed Horwitz Post Dissertation Fina docx

 Best Practice Behaviors 
 
The associations between financial literacy and planning for retirement have been well 
studied. Those with higher levels of financial knowledge are more likely to be ready for 
retirement (Lusardi & Mitchell, 2009). Therefore, higher levels of financial literacy are posited 
to be associated with several retirement planning best practice behaviors. A summary of 
literature on representative best practice behaviors helps establish the content, definitions, and 
measures for use.  
  

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107 
 Calculating Retirement Savings Needs 
 
 
For the purpose of measuring the best practice behaviors of retirement planning, Lusardi 
and Mitchell (2007a, 2007c, 2011) developed three modular questions for the HRS survey. Of 
these three questions, one of them was also used in the 2008 and 2012 NFCS and is similar to a 
question used previously in the TIA-CREF surveys and by the EBRI in the Retirement 
Confidence Survey (Ameriks, Caplin, & Leahy, 2003; Lusardi & Mitchell, 2007a, 2011). The 
HRS studies showed that less than one-third (31%) of the respondents indicated that they had 
attempted to calculate how much they would need to save for retirement (Lusardi & Mitchell, 
2011). These findings support earlier research by Lusardi and Mitchell from previous HRS 
waves, which indicated that people gave very little thought to retirement, even when they were 
within just a few years of it (Lusardi, 1999, 2003, 2008). The low levels of retirement planning 
were also found among higher levels of attained education (Ameriks et al., 2003). The behavior 
of calculating retirement savings needs is a critical aspect of overall retirement planning, 
commensurate with wealth accumulation outcomes, and is considered to be a retirement 
preparedness best practice behavior (Lusardi & Mitchell, 2011).