Retirement Drawdown Defaults: The Role of Implied Endorsement
71 Pages Posted: 19 Apr 2018 Last revised: 24 Aug 2018
Date Written: August 17, 2018
We explore whether implied endorsement is an explanation for the stickiness of retirement wealth drawdown defaults. Using an experimental survey fielded in the Netherlands and Australia, we analyze the extent to which individuals stick to default drawdowns and whether they perceive these as implicit advice from government or recommendations from peers. We find that vulnerable groups - with low financial resources and pension capability - are more likely to find implied endorsement important. As expected, the peer effect is reduced for those with less opportunity to participate in a social network but is enhanced for those who are risk averse.
Keywords: decumulation policy, defaults, peer effects
JEL Classification: D14, D90, J14, J26
Suggested Citation: Suggested Citation