Motivating Retirement Planning: Problems and Solutions

Selnow, Gary M.

doi:10.2139/ssrn.472384

Motivating Retirement Planning: Problems and Solutions

Published in Mitchell, O. and S. Utkus (Eds.) (2004). Pension Design and Structure: New Lessons from Behavioral Finance. Oxford, UK: Oxford University Press.

Pension Research Council WP2003-7

Posted: 12 Jan 2004 Last revised: 6 Apr 2020

See all articles by Gary M. Selnow

Gary M. Selnow

University of Pennsylvania - The Wharton School

Date Written: 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.

Suggested Citation: Suggested Citation

Selnow, Gary M., Motivating Retirement Planning: Problems and Solutions (2003). Published in Mitchell, O. and S. Utkus (Eds.) (2004). Pension Design and Structure: New Lessons from Behavioral Finance. Oxford, UK: Oxford University Press., Pension Research Council WP2003-7, Available at SSRN: https://ssrn.com/abstract=472384 or http://dx.doi.org/10.2139/ssrn.472384