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Evaluating Web-based Savings Interventions: A Preliminary Assessment

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Author Info

  • Wei-Yin Hu

    (Financial Engines)

  • Olivia S. Mitchell

    (The Wharton School of the University of Pennsylvania)

  • Cynthia Pagliaro

    (Vanguard Center for Retirement Research)

  • Stephen P. Utkus

    (Vanguard Center for Retirement Research)

Abstract

There is reason to believe that technological approaches can help promote voluntary saving in 401(k) retirement accounts. Working with Vanguard, a leading 401(k) plan administrator, we are evaluating the impact of introducing innovations to websites made available to retirement plan participants. The first innovation is a “Boost Your Saving” dial added to several plan homepages immediately after participants log on. The second innovation is a red/yellow/green “Traffic Signal” that can help people evaluate how well they are prepared for retirement. Our goal is to examine contribution and portfolio allocation patterns in the cross-section and also compare pre/post outcomes. The present report provides a preliminary evaluation of the impact on 401(k) plan saving decisions of the web-based savings dial, designed to increase the salience of retirement saving. In what follows, we outline the innovation and some preliminary results. We show that including the savings dial on participants’ webpages did boost plan contribution rates. Nevertheless the effect appears to have dissipated after several months, perhaps due to the skewed distribution of participant web logons or to exogenous tax law changes occurring during our evaluation period. We are continuing to evaluate the experiment over time to measure its long-term effects.

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File URL: http://www.mrrc.isr.umich.edu/publications/Papers/pdf/wp299.pdf
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Bibliographic Info

Paper provided by University of Michigan, Michigan Retirement Research Center in its series Working Papers with number wp299.

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Length: 27 pages
Date of creation: Oct 2013
Date of revision:
Handle: RePEc:mrr:papers:wp299

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  1. Pierre-Olivier Gourinchas & Jonathan A. Parker, 1999. "Consumption Over the Life Cycle," NBER Working Papers 7271, National Bureau of Economic Research, Inc.
  2. Jonathan Skinner, 2007. "Are You Sure You're Saving Enough for Retirement?," Journal of Economic Perspectives, American Economic Association, vol. 21(3), pages 59-80, Summer.
  3. Kenneth R. French, 2008. "Presidential Address: The Cost of Active Investing," Journal of Finance, American Finance Association, vol. 63(4), pages 1537-1573, 08.
  4. Milton Friedman, 1957. "A Theory of the Consumption Function," NBER Books, National Bureau of Economic Research, Inc, number frie57-1.
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  6. Annamaria Lusardi & Olivia S. Mitchell, 2013. "The Economic Importance of Financial Literacy: Theory and Evidence," NBER Working Papers 18952, National Bureau of Economic Research, Inc.
  7. Saez, Emmanuel, 2007. "Details Matter: The Impact of Presentation and Information on the Take-up of Financial Incentives for Retirement Saving," CEPR Discussion Papers 6386, C.E.P.R. Discussion Papers.
  8. Milton Friedman, 1957. "Introduction to "A Theory of the Consumption Function"," NBER Chapters, in: A Theory of the Consumption Function, pages 1-6 National Bureau of Economic Research, Inc.
  9. Cagetti, Marco, 2003. "Wealth Accumulation over the Life Cycle and Precautionary Savings," Journal of Business & Economic Statistics, American Statistical Association, vol. 21(3), pages 339-53, July.
  10. Casari, Marco, 2006. "Pre-Commitment and Flexibility in a Time Decision Experiment," Purdue University Economics Working Papers 1183, Purdue University, Department of Economics.
  11. Orazio P. Attanasio & Guglielmo Weber, 2010. "Consumption and Saving: Models of Intertemporal Allocation and Their Implications for Public Policy," Journal of Economic Literature, American Economic Association, vol. 48(3), pages 693-751, September.
  12. Justine Hastings & Olivia S. Mitchell, 2010. "How Financial Literacy and Impatience Shape Retirement Wealth and Investment Behaviors," Working Papers wp233, University of Michigan, Michigan Retirement Research Center.
  13. Annamaria Lusardi & Olivia S. Mitchell, 2011. "Financial Literacy Around the World: An Overview," CeRP Working Papers 106, Center for Research on Pensions and Welfare Policies, Turin (Italy).
  14. Eric French, 2000. "The effects of health, wealth, and wages on labor supply and retirement behavior," Working Paper Series WP-00-2, Federal Reserve Bank of Chicago.
  15. John Karl Scholz & Ananth Seshadri & Surachai Khitatrakun, 2004. "Are Americans Saving "Optimally" for Retirement?," NBER Working Papers 10260, National Bureau of Economic Research, Inc.
  16. Richard H. Thaler & Shlomo Benartzi, 2004. "Save More Tomorrow (TM): Using Behavioral Economics to Increase Employee Saving," Journal of Political Economy, University of Chicago Press, vol. 112(S1), pages S164-S187, February.
  17. Olivia S. Mitchell & Stephen Utkus, 2012. "Target-Date Funds in 401(k) Retirement Plans," NBER Working Papers 17911, National Bureau of Economic Research, Inc.
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