Cavanagh, J. A. & Sharpe, D. L. (2002). The impact of debt levels on participation in and level of discretionary retirement savings.
Financial Counseling and Planning, 13(1), 47-59.
The Impact of Debt Levels on Participation in and Level of Discretionary Retirement Savings
Joyce A. Cavanagh1 and Deanna L. Sharpe2
This study used the 1998 Survey of Consumer Finances to examine the relationship between consumer debt levels and discretionary retirement savings in IRAs, Keoghs, 401(k)s, 403(b)s, thrift savings and supplemental retirement annuities. Results of a two-stage analysis indicated that installment debt deterred participation in discretionary retirement savings. Among those who had discretionary retirement savings balances, accumulations were significantly lower for those who carried a credit card balance forward and for those who had installment debt.
Key words: Debt levels, Discretionary savings, Retirement savings
1. Joyce A. Cavanagh, Assistant Professor and State Specialist, University of Missouri-Columbia, 162 Stanley Hall, Columbia, Mo 65211. Phone: 573-882-6289. Fax: 573- 884-5768. E-mail: CavanaghJ@missouri.edu
2. Deanna L. Sharpe, Associate Professor, University of Missouri-Columbia, 239 Stanley Hall, Columbia, Mo 65211. Phone: 573-882-9652. Fax: 573-884-8389. E-mail: SharpeD@missouri.edu