Save More Tomorrow™: Using Behavioral Economics to Increase Employee Saving

  title={Save More Tomorrow{\texttrademark}: Using Behavioral Economics to Increase Employee Saving},
  author={Richard H. Thaler and Shlomo Benartzi},
  journal={Journal of Political Economy},
  pages={S164 - S187}
As firms switch from defined‐benefit plans to defined‐contribution plans, employees bear more responsibility for making decisions about how much to save. The employees who fail to join the plan or who participate at a very low level appear to be saving at less than the predicted life cycle savings rates. Behavioral explanations for this behavior stress bounded rationality and self‐control and suggest that at least some of the low‐saving households are making a mistake and would welcome aid in… 
Using Behavioral Finance to Help Employees Achieve Their Retirement Saving Goals
Thirty years after the birth of the 401(k) plan, why are so many employees still saving so little for retirement, despite the efforts of plan sponsors and providers? The brief answer is that while
Retirement Planning: Contributions from the Field of Behavioral Finance and Economics
An important challenge facing employees and societies is saving and investing sufficient funds for a comfortable retirement. Research shows that human financial decision-making behavior is not always
Behavioral Finance and Retirement Plan Contributions: How Participants Behave, and Prescriptive Solutions
The Pension Protection Act of 2006 appears to support new retirement plan design alternatives by providing incentives to plan sponsors that implement automatic features such as automatic enrollment and deferral rate escalation, which allows plan sponsors to choose more aggressive investment defaults.
Does it pay to be SMarT
The Save More Tomorrow plan has proven effective at raising employee saving rates and appears to be popular among participants and the media. An important question has remained on the minds of
The nudging role of behavioral economics in retirement savings decisions: Current situation and future prospects
: Richard Thaler was awarded the 2017 Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel for his contributions to behavioral economics. Based on bounded rationality, procrastination,
TRENDS AND ISSUES Capitalizing on Inertia : Automation Boosts Retirement Savings
In recent years, a number of academic researchers have conducted analyses of retirement plan designs to better understand features that promote greater participation and contribution rates. Renowned
Spend More Today Safely: Using Behavioral Economics to Improve Retirement Expenditure Decisions with SPEEDOMETER Plans
This article examines how behavioral economics can be used to improve the spending decisions of retirees, using a SPEEDOMETER (or Spending Optimally Throughout Retirement) retirement expenditure plan
Household Decision Making and Savings Impacts: Further Evidence from a Commitment Savings Product in the Philippines
Commitment devices for savings could benefit those with self-control as well as familial or spousal control issues. We find evidence to support both motivations. We examine the impact of a commitment
Three Essays on the Behavioural Economics of Saving for Retirement
Three Essays on the Behavioural Economics of Saving for Retirement Derek Robert James Messacar Doctor of Philosophy Graduate Department of Economics University of Toronto 2016 This thesis comprises
Save More Later? The Effect of the Option to Choose Delayed Savings Rate Increases on Retirement Wealth
Prior research in economics and psychology has documented that individuals exhibit time-inconsistent preferences when faced with the opportunity to take an action that involves immediate costs in


Can Americans Afford to Retire? New Evidence on Retirement Saving Adequacy
INTRODUCTION The United States experienced a substantial risk transfer from the individual to the group in the retirement arena over the last half century, with the development of massive government
The Adequacy of Household Saving
DURING THE PAST half century, retirement income security in the United States has been based on a combination of social security, employer-sponsored pensions, and households' own saving. Social
Self-control, mental accounting, and framing are incorporated in a behavioral enrichment of the life-cycle theory of saving called the Behavioral Life-Cycle (BLC) hypothesis. The key assumption of
How do household portfolio shares vary with age? Unpub-lished working paper
Using pooled cross-sectional data from the Surveys of Consumer Finances, and new panel data from TIAA-CREF, we examine the empirical relationship between age and portfolio choice, focusing on the
Concepts and Measures of Earnings Replacement During Retirement
This paper compares the well-being of the Retirement History Survey of the elderly with their own previous levels of income and economic welfare. Traditional replacement rates are calculated,
Doing It Now or Later
Though economists assume that intertemporal preferences are time-consistent, evidence suggests that a person's relative preference for well-being at an earlier moment over a later moment increases as
Education and Saving: The Long-Term Effects of High School Financial Curriculum Mandates
Over the last forty years, the majority of states have adopted consumer education policies, and a sizable minority have specifically mandated that high school students receive instruction on topics
Golden Eggs and Hyperbolic Discounting
Hyperbolic discount functions induce dynamically inconsistent preferences, implying a motive for consumers to constrain their own future choices. This paper analyzes the decisions of a hyperbolic