Goal clarity and financial planning activities as determinants of retirement savings contributions.

Retirement counselors, financial service professionals, and retirement intervention specialists routinely emphasize the importance of developing clear goals for the future; however, few empirical studies have focused on the benefits of retirement goal setting. In the present study, the extent to which goal clarity and financial planning activities predict retirement savings practices was examined among 100 working adults. Path analysis techniques were used to test two competing models, both of which were designed to predict savings contributions. Findings provide support for the model in which retirement goal clarity is a significant predictor of planning practices, and planning, in turn, predicts savings tendencies. Two demographic variables-income and age-were also revealed to be important elements of the model, with income accounting for roughly half of the explained variance in savings contributions. The results of this study have implications for the development of age-based models of planning, as well as implications for retirement counselors and financial planners who advise workers on long-term saving strategies.