How Can Customized Information Change Financial Plans?
Many workers nearing retirement experienced a dramatic decrease in their retirement assets when the stock market crashed in 2008. In order to maintain their expected standard of living in retirement, workers needed to work longer, save more, or do both. To measure the response of older workers to this downturn, the Center for Retirement Research at Boston College (CRR) fielded the CRR 2009 Retirement Survey on a nationally representative sample of 45-59-year-old labor force participants with relatively high pre-downturn assets. This brief is the final in a series of four based on the CRR 2009 Retirement Survey. The first brief described the Survey and highlighted the inclusion of numerous financial, employment, and behavioral factors that are omitted from other surveys. The second brief explored the relationship between these factors and worker responses to the downturn. The third brief examined how worker responses were affected when their options were made explicit – work longer, save more, or live on less in retirement. This brief explores how respondents reacted once they received information tailored to their specific situation. This brief is organized as follows. The first section provides an overview of the workers’ initial responses – work more, save more, both, or neither. The second section describes how these stated responses changed after respondents received “expert advice” that quantified the trade-off based on their specific circumstances. The third section looks at the characteristics of responders who remained committed to taking no action even after the expert advice. The fourth section assesses whether the expert advice led certain respondents to better calibrate their plans. The final section concludes that providing tailored financial advice may help some individuals improve their response to an adverse financial development.
|Date of creation:||Mar 2011|
|Date of revision:||Mar 2011|
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