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The importance of default options for retirement saving outcomes: evidence from the United States

Author

Listed:
  • John Beshears

    (Department of Economics, Harvard University)

  • James J. Choi

    (Yale School of Management)

  • David Laibson

    (Department of Economics, Harvard University)

  • Brigitte C. Madrian

    (Department of Business and Public Policy, University of Pennsylvania, Wharton School)

Abstract

This paper summarizes the empirical evidence on how defaults impact retirement savings outcomes. After outlining the salient features of the various sources of retirement income in the U.S., the paper presents the empirical evidence on how defaults impact retirement savings outcomes at all stages of the savings lifecycle, including savings plan participation, savings rates, asset allocation, and post-retirement savings distributions. The paper then discusses why defaults have such a tremendous impact on savings outcomes. The paper concludes with a discussion of the role of public policy towards retirement saving when defaults matter.

Suggested Citation

  • John Beshears & James J. Choi & David Laibson & Brigitte C. Madrian, 2005. "The importance of default options for retirement saving outcomes: evidence from the United States," CeRP Working Papers 43, Center for Research on Pensions and Welfare Policies, Turin (Italy).
    • Handle: RePEc:crp:wpaper:43
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    Keywords

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    JEL classification:

    • D0 - Microeconomics - - General
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors

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