Simplification and Saving
The daunting complexity of important financial decisions can lead to procrastination. We evaluate a low-cost intervention that substantially simplifies the retirement savings plan participation decision. Individuals received an opportunity to enroll in a retirement savings plan at a pre-selected contribution rate and asset allocation, allowing them to collapse a multidimensional problem into a binary choice between the status quo and the pre-selected alternative. The intervention increases plan enrollment rates by 10 to 20 percentage points. We find that a similar intervention can be used to increase contribution rates among employees who are already participating in a savings plan.
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Copy CitationJohn Beshears, James J. Choi, David Laibson, and Brigitte C. Madrian, "Simplification and Saving," NBER Working Paper 12659 (2006), https://doi.org/10.3386/w12659.Download Citation
Non-Technical Summaries
- Quick Enrollment substantially increases savings plan participation relative to the standard opt-in enrollment regime, although these...
Published Versions
Beshears, John & Choi, James J. & Laibson, David & Madrian, Brigitte C., 2013. "Simplification and saving," Journal of Economic Behavior & Organization, Elsevier, vol. 95(C), pages 130-145. citation courtesy of 
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