Collaborative Research: Lifecycle Savings and Retirement Planning

点击翻译按钮获取中文摘要

Saving for retirement and the allocation of accumulated savings upon retirement are two of the most consequential financial decisions that U.S. households make. Yet, the available evidence suggests that individuals do not save adequately for their retirement, despite access to tax deferred retirement accounts. Further, upon retirement, households seem reluctant to make use of annuities which provide insurance against longevity risk more efficiently than self-insurance. Finally, many households claim social security benefits at the earliest possible opportunity at a substantial reduction in their monthly benefits. This project seeks to understand such decisions and what might be done to encourage households to make better decisions using theory and experiments with paid human subjects. Thus, the goals of this project are in line with the NSF's mission to advance national prosperity and welfare.This project consists of three main studies, each of which place subjects in a realistic, individual choice setting and explore the decisions they make in that setting, where the decisions are incentivized by monetary payments. Experimental subjects will be a mix of university students and a broader, more demographically rich subject population recruited from Amazon Mechanical Turk. The first study explores the role of Tax Deferred Accounts (TDA) for savings decisions. The aim of this project is to understand how TDAs affect savings choices and how "nudges" such as automatic enrollment in TDAs might improve savings behavior. The second study explores the annuitization decision that households face at the time of retirement. The aim of this project is to understand the factors affecting annuity take-up. The third study explores why retirees don't delay taking social security benefits. The goal of this project is to understand both the positive and normative aspects of the retirement benefit redemption decision.This award reflects NSF's statutory mission and has been deemed worthy of support through evaluation using the Foundation's intellectual merit and broader impacts review criteria.