Using Vignettes to Improve Understanding of Social Security and Annuities

Anya Samek, Arie Kapteyn and Andre Gray

No 26176, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Evidence shows that people have difficulty understanding complex aspects of retirement planning, which leads them to under-utilize annuities and claim Social Security benefits earlier than is optimal. To target this problem, we developed vignettes about the consequences of different annuitization and claiming decisions. We evaluated our vignettes using an experiment with a representative online panel of nearly 2,000 Americans. In our experiment, respondents were either assigned to a control group with no vignette, to a written vignette, or to a video vignette. They were then asked to give advice to hypothetical persons on annuitization or Social Security claiming, and were asked factual questions about these concepts. We found evidence that being exposed to vignettes led respondents to give better advice. For example, the gap between advised claim age for a relatively healthy person versus a relatively sick person was larger by nearly a year in the vignette treatments versus the control group. Further, the vignettes increased financial literacy related to these concepts by 10-15 percentage points. Interestingly, the mode of communication did not have a significant impact – the video and written vignettes were equally effective.

JEL-codes: H3 J26 (search for similar items in EconPapers)
Date: 2019-08
New Economics Papers: this item is included in nep-age, nep-exp, nep-fle and nep-hea
Note: AG
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Published as Anya Samek & Arie Kapteyn & Andre Gray, 2022. "Using vignettes to improve understanding of Social Security and annuities," Journal of Pension Economics and Finance, vol 21(3), pages 326-343.

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