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This paper evaluates some of the key lessons of behavioral economics and finance research over the last decade for pension plan design. We divide the discussion into the natural phases of the retirement saving life cycle: accumulation, investment, and decumulation. After reviewing the lessons of behavioral finance, we conclude by outlining plan design alternatives that would be of use to plan sponsors and policymakers seeking to design more cost-effective and efficient retirement plans for the future.
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©2003 Pension Research Council of the Wharton School of the University of Pennsylvania. All Rights Reserved
The authors are grateful for comments provided by Shlomo Benartzi. Opinions expressed are solely those of the authors. Financial support for this research was provided by the National Bureau of Economic Research and the Pension Research Council. This study is part of the NBER program on the Economics of Aging.
Date Posted: 04 September 2019