Page 1 Page 2 Page 3 Page 4 Page 5 Page 6 Page 7 Page 8 Page 9 Page 10 Page 11 Page 12 Page 13 Page 14 Page 15 Page 16 Page 17 Page 18 Page 19 Page 20 Page 21 Page 22 Page 23 Page 24 Page 25 Page 26 Page 27 Page 28 Page 29 Page 30 Page 31 Page 32 Page 33 Page 34 Page 35 Page 36 Page 37 Page 38 Page 39 Page 40 Page 41 Page 42 Page 43 Page 44 Page 45 Page 46 Page 47 Page 48 Page 49 Page 50 Page 51 Page 52 Page 53 Page 54 Page 55 Page 56 Page 57 Page 58 Page 59 Page 60 Page 61 Page 62 Page 63 Page 64 Page 65 Page 66 Page 67 Page 68 Page 69 Page 70 Page 71 Page 72 Page 73 Page 74 Page 75 Page 76 Page 77 Page 78 Page 79 Page 80 Page 81 Page 82 Page 83 Page 84 Page 85 Page 86 Page 87 Page 88 Page 89 Page 90 Page 91 Page 92 Page 93 Page 94 Page 95 Page 96 Page 97 Page 98 Page 99 Page 100 Page 101 Page 102 Page 103 Page 104 Page 105 Page 106 Page 107 Page 108AGING IN THE 21S T CENTURY 60 Personality How much people save for retirement can also be influenced by their personality. Research suggests that the personality trait of conscientiousness is associated with a range of positive life outcomes. Is one of those outcomes saving for retirement? Conscientious individuals are organized, respon- sible, hardworking, thorough and careful. Taking into account gender, ethnicity, age, years of education, cognitive ability, and other personality traits, highly conscientious participants earned an additional $114,000 (in 2016 dollars) over their lifetimes and have more positive emotions and greater life satisfaction (Duckworth et al. 2012). Husbands and wives who are both consci- entious earn $202,945 more. Interestingly, the personality traits of openness and agreeableness are associated with slightly lower income and less wealth accumulation; agreeable- ness is also associated with lower life satisfaction. A similar study finds that conscientiousness is also associated with retirement preparedness (Hurd et al. 2012). Conscientiousness has a large effect on the probability of being retirement ready, in the sense of having a 95% chance of not running out of savings before death. Conscientious households also appear to spend more cautiously during retirement, holding on to their retirement savings longer. Employer Incentives Employer-sponsored DC pension plans are typically voluntary: employees have the option to save a portion of their salary in 401(k)-type investments. However, many workers fail to take advantage of this opportunity to save for retirement. To encourage saving in these plans, many employers offer to match, at some level, the employee contribution. For example, a 100% match would mean that for every dollar the employee contributes to the plan, the employer will match with one dollar. Some employers cap the amount that can be matched and vary in the extent of matching from a 25% match up to 200%, although the latter is rare (Engelhardt and Kumar 2007). Comparing HRS participants whose companies offer matching to those who do not shows that matching increases savings on average. Despite matching incentives, however, only 3% of HRS participants whose employers offer matching plans contribute up to the maximum allowed. Dushi and Honig (2015) find that people are not well-informed about their employer-provided DC plans including whether or not they are even participating, how much they may be contributing, and how much they have in their accounts. Other research shows that those with lower incomes are the least likely to participate in employer-provided retirement plans — not only because of low take-up rates but because they are also much less likely than higher-income individuals to work for firms that offer retirement pension plans (A. Wu et al. 2015). Figure 3-3 demonstrates the shift from DB to DC pensions over the past 20 years. In 1992, 19% of HRS participants held DC pensions compared to 29% in 2014. DB pension coverage went from 23% to 17% over that same time. The Retirement-Consumption Puzzle The life-cycle theory of savings suggests that people save money during their working lives to be able to maintain the same living standard they had while working. However, early research People are not well-informed about their employer-provided defined contribution plans including whether or not they are even participating, how much they may be contributing, and how much they have in their accounts. Highly conscientious participants earned an additional $114,000 over their lifetimes and have more positive emotions and greater life satisfaction.