Model for Assesing Future Retirment Adequacy of Recent College Graduates

This study created a model to assess the general retirement literacy and level of intention to save for retirement of recent Millennial college students about to graduate from four-year public universities in the United States. The study sought to answer the questions: How prepared are students to make informed and effective financial decisions related to their retirement at the point where they begin their careers? Which factors influence levels of preparation? What are the levels of intention for these students regarding retirement investment? Identifying the segments of the new college graduate population that are particularly unprepared to act on retirement financial decisions is the first step toward intervening in a persistent and growing problem. Higher education administrators equipped with this information, as with existing efforts in student retention, have the ability to develop targeted strategies to improve educational outcomes. The theory of Optimal Retirement Investment is advanced as a result of the study. Conducted at two large four-year public universities, this study confirmed previous academic and popular observations that students are unprepared and will likely under-save for retirement. The study employed a quantitative causal comparative methodology and included the development of an online survey and two stochastic simulation models. The data generated from the survey and models were analyzed through reliability analysis to develop sub scales, and correlation and multiple regression analysis to identify factors influencing retirement literacy, retirement intention, and ultimately projected retirement savings balances.