CHALLENGES OF TRAINING PRE-RETIREES TO MAKE SOUND FINANCIAL-PLANNING DECISIONS

One of the more pressing societal challenges American institutions wil l face in the coming decades is to ensure that individuals who choose to leave the workforce have made wise financial decisions in preparati ons for retirement (Cutler, Gregg, & Lawton, 1992). The present study was designed to measure pre-retirees' ability to make accurate decisio ns about the affordability of retiring from employment. The two goals of the investigation were to measure whether knowledge of finance and retirement planning mediated the quality of individuals' decisions, an d to determine whether a brief educational training program could be u sed to improve decisions performance. A within-subjects design was emp loyed in which subjects were asked to provide solutions to four realis tic retirement planning decision scenarios: two prior to an educationa l intervention. Results indicate that although subjects' knowledge of the domain increased significantly as a function of training, the over all quality of their decisions did not significantly improve from pret est to posttest. Implications of these findings are discussed in terms of both the individual and society.