Assessing the Effect of Self-Control on Retirement Preparedness of U.S Households

We examine the self-control problems of U.S households and their effect on households' retirement preparedness based on the Behavioral Life-Cycle Hypothesis. Self-control problems are measured using four variables: health condition, credit attitude, saving decisions, and planning horizon. From the 1995-2007 Survey of Consumer Finances datasets, we found that 54-64% of households are prepared for adequate retirement during 1995-2007. Our multivariate results show that households with health, credit revolving and saving decision self-control problems are less likely to have adequate retirement preparedness than those without such self-control problems. For planning horizon variable, households with the longest saving horizon (longer than 10 years) have higher likelihood of having an adequate retirement than households with next few months of planning horizon