Retirement

Work, Aging and Retirement, 2016, Vol. 2, No. 1, pp. 65–72

doi:10.1093/workar/wav019

Advance Access publication August 11, 2015

Article

Perceptions of Retirement Savings Relative to Peers

Janet L. Koposko1, Helen Kiso2, Douglas A. Hershey1, and Paul Gerrans3

1. Department of Psychology, Oklahoma State University

2. Department of Psychology, Susquehanna University

3. Department of Accounting and Finance, University of Western Australia, Crawley, Australia

A B ST R A CT

Many individuals find it helpful to talk to others about saving for retirement (Hershey, Henkens, & van Dalen, 2010). Discussions with peers

regarding the retirement saving process or the adequacy of savings can

facilitate or hinder planning efforts, by placing into context perceptions of the quality of one’s own money management strategies. Social

comparisons of this type (also known as peer comparisons) are not

new to the psychological literature; indeed, it is a topic that has been

extensively studied by social psychologists in a variety of ways over

the years (see Corcoran, Crusius, & Mussweiler, 2011; Garcia, Tor, &

Schiff, 2013; Hoorens & van Damme, 2012, and Suls & Wheeler, 2000

for reviews). However, we were only able to identify one investigation

that examined perceived social norms in relation to saving for retirement (Griffin, Loe, & Hesketh, 2012). The goal of the present study

is to apply the concept of social comparisons, originated by Festinger

(1954), and by extension social comparison biases, to the topic of

financial planning for retirement. Therefore, the true value added

aspect of the present investigation involves determining whether individuals’ perceptions of others’ saving practices has an influence on

one’s own saving behavior, over and above that which can be explained

using psychological measures already shown to predict saving.

Numerous studies suggest that Americans will not receive sufficient pension income after leaving the workforce...