NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

The Importance of Default Options for Retirement Savings Outcomes: Evidence from the United States

John Beshears, James J. Choi, David Laibson, Brigitte C. Madrian

NBER Working Paper No. 12009
Issued in February 2006, Revised in March 2007
NBER Program(s):AG, EFG, PE

This paper summarizes the empirical evidence on how defaults impact retirement savings outcomes. After outlining the salient features of the various sources of retirement income in the U.S., the paper presents the empirical evidence on how defaults impact retirement savings outcomes at all stages of the savings lifecycle, including savings plan participation, savings rates, asset allocation, and post-retirement savings distributions. The paper then discusses why defaults have such a tremendous impact on savings outcomes. The paper concludes with a discussion of the role of public policy towards retirement saving when defaults matter.

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Document Object Identifier (DOI): 10.3386/w12009

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