Wharton Pension Research Council Working Papers
 

Title

Motivating Retirement Planning: Problems and Solutions

Document Type

Working Paper

Date of this Version

1-1-2003

Abstract

People often find it difficult to make the right decision about retirement savings. The payoffs are in the distant future, and the promise of pleasure tomorrow can mean pain today. The wrong decision yields an instant gain, the outcome is uncertain, the decision can be postponed without immediate penalty. In the end, the pressures of immediate gratification, delayed benefit, the unknown, the uncertain, the uncomfortable, ally against wise decisions. Yet, while many people yield to these influences, many others make the right choice. That drives us to ask why. Recent research has examined various approaches to promoting retirement investment. One promising strategy, automatic enrollment, taps into an old theory about the functional order of behavior and attitudes. This chapter examines the theory to understand why automatic enrollment has a good chance of overcoming the natural impediments to wise decisions about retirement investments.

Comments

The published version of this Working Paper may be found in the 2004 publication: Pension Design and Structure: New Lessons from Behavioral Finance.

Working Paper Number

WP2003-07

Copyright/Permission Statement

©2003 Pension Research Council of the Wharton School of the University of Pennsylvania. All Rights Reserved

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Date Posted: 04 September 2019