At three large firms offering 401(k) plans, we assess the impact of financial literacy and trust on 401(k) savings behavior in voluntary and automatic enrollment 401(k) plans. Financial literacy plays a critical role in improving 401(k) savings behavior — it reduces both the proportion of...

Workers under age 35 have the lowest 401(k) participation of any age group. Failing to save for retirement at a young age means missing out on compounded investment earnings that can substantially ease the burden of building a nest egg. The reasons young workers save less for retirement range...

For years, researchers have been puzzled by why so few people purchase fixed, immediate, lifetime annuities for their retirement portfolios. Rational theories have been proposed, but none can fully explain the small size of the actual market. Very recently, academics have turned their attention...

This paper investigates two methods for improving participants’ asset allocations in their 401(k) plans: personalized online advice and managed account services. This paper uses a unique new dataset of individual-level administrative data from one 401(k) plan and recommendation data from an...

Using a unique dataset of 401(k) trades, this paper’s results suggest that in most cases only equity fund outflows, not inflows, are significantly related to their own past fund returns. Also, the strong correlation between flows and lagged returns is only significant when fund returns are...

We examine equity portfolio choices of a panel of over four thousand 401(k) investors during the April 1994-August 1998 period. In the majority of participant/year observations all the equity funds available are held; hence, it appears that most participants take full advantage of the...

Australia’s retirement income system is regarded by some as among the best in the world. It has achieved high individual saving rates and broad coverage at reasonably low cost to the government. Australia’s system does have shortcomings. It is heavily dependent on defined contribution plans...

Plan knowledge and trust in financial institutions – two variables missing from standard neoclassical or behavioral models of decision-making – are strongly correlated to 401(k) savings behavior based on results from this paper. In voluntary enrollment settings, plan knowledge and...