March 2023
31Mar

Frames, Incentives, and Education: Effectiveness of Interventions to Delay Public Pension Claiming

By Franca Glenzer, Pierre-Carl Michaud & Stefan Staubli Many people forgo a higher stream of public pension income by claiming early. We provide both quasi-experimental and survey-experimental evidence that the timing of public pension claiming is relatively inelastic to changes in financial incentives in Canada. Using the survey experiment, we evaluate the effect of two different educational interventions and different ways of framing the incentive to delay claiming. While all three types of interventions induce delays, these interventions have heterogeneous...

March 31, 2023
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10Mar

The Influence of Financial Literacy on Retirement Planning in South Africa

By Nyasha Tapiwa Dhlembeu, Mamekwa Katlego Kekana & Mpinda Freddy Mvita Background: A shift in the retirement planning and pensions landscape has created an enormous responsibility for individuals to plan for their retirement provision actively. Very few South Africans reach the average retirement age of 65 years with sufficient funds to sustain themselves during their retirement. Purpose/objective: Using secondary data from the 2011 South African Social Attitudes Survey (SASAS), this study aims to examine the influence financial literacy has on the...

March 10, 2023
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January 2023
18Jan

A Behaviorally Informed Financial Education Program for the Financially Vulnerable: Design and Effectiveness

By Ernst-Jan de Bruijn, Gerrit Antonides & Tamara Madern Financially vulnerable consumers are often associated with suboptimal financial behaviors. Evaluated financial education programs so far show difficulties to effectively reach this target population. In our attempt to solve this problem, we built a behaviorally informed financial education program incorporating insights from both motivational and behavioral change theories. In a quasi-experimental field study among Dutch financially vulnerable people, we compared this program with both a control group and a traditional program group....

January 18, 2023
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06Jan

Standardized, Unitized, Accretive Longevity Insurance: Lessons from the Differing Demand for Annuities and Life Insurance

By Andrew Stumpff Morrison The historic U.S. shift from defined-benefit to defined-contribution employer-sponsored retirement plans has produced, among other things, a reduction in sharing of the risk of outliving one’s retirement savings. Commercial annuity contracts are available to insure this risk, but despite efforts to encourage their acquisition, few people own them. Close comparison with another life-cycle risk – that addressed by life insurance, which is more widely purchased by consumers – highlights as a probable reason for this low...

January 6, 2023
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December 2022
22Dec

New FCA nudges for better long-term outcomes in non-workplace pensions

The UK’s Financial Conduct Authority (FCA) has published new rules for providers of non-workplace pensions. The intervention was prompted by FCA findings that suggested that, like in defined contribution workplace pensions, the non-workplace pension sector suffered from low consumer engagement combined with complex and confusing products and charges. The regulator said the issue had caused a lack of competitive pressure to drive better value for consumers. It also found that non‑advised customers often may end up investing in products that...

December 22, 2022
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13Dec

Overcoming Procrastination In Saving For Retirement

Procrastination in saving for retirement is so pervasive that it can be considered the norm. Retirement is a long way off and how much will be needed is unclear. The question is complicated by possible allocation to estate bequests and (for homeowners) the possible use of home equity in the process. Procrastination is further encouraged by expectations that future income growth will enhance the capacity to save in the future, further rationalizing the failure to save now. Overcoming Procrastination With...

December 13, 2022
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November 2022
28Nov

U.S. Visions of early retirement may sway some to save more

Employers looking to spur their employees to save more for retirement might want to consider enticing them with the prospect of retiring early. It's a motivator that displayed encouraging early promise for the Federal Retirement Thrift Investment Board, the administrator of the federal government's $720 billion Thrift Savings Plan. In an initiative to coax its participants to contribute more to the plan, the FRTIB last year sent participants personalized communications that detailed how much more they would need to save each...

November 28, 2022
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11Nov

Cognitive Abilities, Self-Efficacy, and Financial Behavior

By Ning Tang This paper investigates the effect of cognitive abilities on financial behavior among older adults. Using the longitudinal dataset of the Health and Retirement Study, I find that cognitive abilities significantly affect financial behavior through two channels: ability and self-efficacy. People with higher cognition scores, who presumably are more capable of processing information and analyzing problems, achieve better financial outcomes. This positive association is especially strong in tasks having high demand of cognitive ability, which confirms the ability...

November 11, 2022
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04Nov

Too much choice counterproductive in retirement systems, new report finds

Giving pension savers the freedom to choose their own investments is beneficial, but including too much choice in a national pension system is counterproductive, according to a new report assessing different retirement frameworks. In the white paper produced by US financial services firm Morningstar – An Evaluation of Retirement Systems Around the World – analysts reach a number of conclusions, saying some countries are better than others at limiting choice; that auto-enrolment programmes are effective and that efforts to engage...

November 4, 2022
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October 2022
07Oct

Disconnected: Reality vs. Perception in Retirement Planning

By Martha Deevy & Steve Vernon This report examines potential interventions and messaging that can help pre-retirees and retirees plan ahead regarding important retirement decisions. The widespread lack of forward-looking planning has vexed retirement planners and researchers for many years. Many problems in later years could have been prevented with planning ahead. Too many people put off making important decisions, only to find themselves later in a serious crisis with limited options. Our research identified interventions and messaging that could be used by...

October 7, 2022
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