PostDoc19-01: Psychological Factors in Adolescence and Financial Retirement Preparation at Midlife

The decline in defined benefit retirement plans coupled with longer life expectancyhas made personal retirement savings a crucial component of a secure retirement. The changing landscape of retirement preparation has placed increasing responsibility on individuals in a complex financial world. This study investigates how psychological factors in adolescence are related to aspects of retirement preparation that support personal retirement savings and promote long-term financial security. This paper uses the new midlife follow-up of the High School and Beyond (1980) study to examine how individuals’ psychological skills and dispositions at the end of high school predict retirement preparation at midlife (age 50 in 2014). Results show that adolescent psychological factors are significantly related to four different aspects of retirement preparation at midlife, even net of midlife socioeconomic characteristics such as educational attainment and household income. The findings suggest that high school may be an effective site for policy interventions targeted at improving workers’ retirement preparedness, as individuals’ characteristics in high school are related to a variety of retirement preparation outcomes over thirty years later.