Retirement planning: important factors influencing a service member's decision to prepare for retirement

Abstract

The purpose of this research study was to identify what financial and nonfinancial retirement planning factors are important to service members and to determine which factors have the most significant influence on a service member's decision to financially prepare for retirement. A voluntary and anonymous online survey was developed and deployed to resident U.S. military students at the Naval Postgraduate School to identify the circumstances that influence decisions to save or not save for retirement. The survey included questions regarding financial resources, resource constraints, and nonfinancial factors. After analyzing the literature and survey data, the findings indicate that saving for unexpected costs outside of retirement accounts, improving financial literacy, and establishing clear retirement goals were important to consider during retirement planning. This research also found that a service member's rank, savings outside of a dedicated retirement account, calculating necessary retirement savings, and conducting retirement planning activities were statistically significant at the 0.05% level. Finally, recommendations were made for the Department of Defense to increase retirement education for service members and provide retirement education on a continual basis, which may encourage service members to increase savings outside of a dedicated retirement account.