Tax-Sheltered Retirement Accounts: Can Financial Education Improve Decisions?

77 Pages Posted: 7 Aug 2019 Last revised: 22 Nov 2021

See all articles by M. Martin Boyer

M. Martin Boyer

HEC Montreal - Department of Finance

Philippe d'Astous

HEC Montreal - Department of Finance

Pierre-Carl Michaud

HEC Montreal

Date Written: July 2019

Abstract

We conduct a stated-choice experiment to analyze the decision to contribute to front- or back-loaded tax-sheltered savings accounts. Our experimental design includes a randomized financial education treatment that provides information on these accounts. We assess whether respondents learn about the tax implications of these accounts and make contribution choices that increase after-tax income when exposed to the intervention. We find that our intervention improves both the understanding of the tax implications of the savings accounts (an increase of 6 to 15 percent) and contribution decisions. We find effects on after-tax lifetime-income for respondents by up to $1,900 per scenario presented.

Suggested Citation

Boyer, M. Martin and d'Astous, Philippe F. and Michaud, Pierre-Carl, Tax-Sheltered Retirement Accounts: Can Financial Education Improve Decisions? (July 2019). NBER Working Paper No. w26128, Available at SSRN: https://ssrn.com/abstract=3432161

M. Martin Boyer (Contact Author)

HEC Montreal - Department of Finance ( email )

3000 Chemin de la Cote-Sainte-Catherine
Montreal, Quebec H3T 2A7
Canada

Philippe F. D'Astous

HEC Montreal - Department of Finance ( email )

3000 Chemin de la Cote-Sainte-Catherine
Montreal, Quebec H3T 2A7
Canada

Pierre-Carl Michaud

HEC Montreal ( email )

3000, Chemin de la Côte-Sainte-Catherine
Montreal, Quebec H2X 2L3
Canada

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
2
Abstract Views
461
PlumX Metrics