Are Retirement Planning Tools Substitutes or Complements to Financial Capability?

Gopi Goda, Matthew R. Levy, Colleen Flaherty Manchester, Aaron Sojourner, Joshua Tasoff and Jiusi Xiao

No 30723, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We conduct a randomized controlled trial to understand how a web-based retirement saving calculator affects workers' retirement-savings decisions. In both conditions, the calculator projects workers' retirement income goal. In the treatment condition, it also projects retirement income based on defined-contribution savings, prominently displays the gap between projected goal and actual retirement income, and allows users to interactively explore how alternative, future contribution choices would affect the gap. The treatment increased average annual retirement contributions by $174 (2.3 percent). However, effects were larger for those with greater financial knowledge, suggesting this type of tool complements, rather than substitutes for, underlying financial capability.

JEL-codes: D14 G53 J32 (search for similar items in EconPapers)
Date: 2022-12
New Economics Papers: this item is included in nep-exp
Note: AG PE
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Published as Gopi Shah Goda & Matthew R. Levy & Colleen Flaherty Manchester & Aaron Sojourner & Joshua Tasoff & Jiusi Xiao, 2023. "Are retirement planning tools substitutes or complements to financial capability?," Journal of Economic Behavior & Organization, vol 214, pages 561-573.

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Journal Article: Are retirement planning tools substitutes or complements to financial capability? (2023)
Working Paper: Are Retirement Planning Tools Substitutes or Complements to Financial Capability? (2022)
Working Paper: Are Retirement Planning Tools Substitutes or Complements to Financial Capability? (2022)
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