IDEAS home Printed from https://ideas.repec.org/a/eee/beexfi/v48y2025ics2214635025000942.html

Undefined benefit: Projections and anchors as guides to retirement decumulation

Author

Listed:
  • Newell, Ben R.
  • Bateman, Hazel
  • Dobrescu, Loretti
  • Embrey, Jake
  • Nian, Rochelle
  • Thorp, Susan

Abstract

Most defined contribution retirement income systems assume that retiring participants have the know-how and confidence to turn their lump sum savings into life-long income. Surprisingly slow withdrawals by retired defined contribution participants cast doubt on this assumption. In this study, we conduct three rounds of lab-in-the-field experiments that give near-to-retirement defined contribution plan participants updating information about withdrawal plans. We show that income projections induce slightly higher rates of withdrawal but this influence is dominated by income anchors. Supporting participants with basic information and the opportunity to engage in the decision process through interactive education tools has the potential to improve their wellbeing in retirement.

Suggested Citation

  • Newell, Ben R. & Bateman, Hazel & Dobrescu, Loretti & Embrey, Jake & Nian, Rochelle & Thorp, Susan, 2025. "Undefined benefit: Projections and anchors as guides to retirement decumulation," Journal of Behavioral and Experimental Finance, Elsevier, vol. 48(C).
    • Handle: RePEc:eee:beexfi:v:48:y:2025:i:c:s2214635025000942
    DOI: 10.1016/j.jbef.2025.101113
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S2214635025000942
    Download Restriction: no
    File URL: https://libkey.io/10.1016/j.jbef.2025.101113?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • G40 - Financial Economics - - Behavioral Finance - - - General
    • G51 - Financial Economics - - Household Finance - - - Household Savings, Borrowing, Debt, and Wealth
    • G53 - Financial Economics - - Household Finance - - - Financial Literacy

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:beexfi:v:48:y:2025:i:c:s2214635025000942. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: https://www.journals.elsevier.com/journal-of-behavioral-and-experimental-finance .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.