Do Retirement Savings Increase in Response to Information About Retirement and Expected Pensions?

Dolls, Mathias; Dörrenberg, Philipp; Peichl, Andreas; Stichnoth, Holger

doi:10.2139/ssrn.3138335

Cited by 8 publications

(9 citation statements)

References 14 publications

(17 reference statements)

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“…The hump-shaped contribution pattern generated by our model is largely in line with actual contribution patterns reported byDolls et al (2018), though they show contributions peaking about five years earlier.…”

supporting

confidence: 87%

Money-Back Guarantees in Individual Retirement Accounts: Still a Good Deal?

Horneff¹,

Liebler²,

Maurer³

et al. 2019

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In the wake of the financial crisis and continued volatility in international capital markets, there is growing interest in mechanisms that can protect people against retirement account volatility. This paper explores the consequences for savers' wellbeing of implementing market-based retirement account guarantees, using a life cycle consumption and portfolio choice model where investors have access to stocks, bonds, and tax-qualified retirement accounts. We evaluate the case of German Riester plans adopted in 2002, an individual retirement account produce that includes embedded mandatory money-back guarantees. These guarantees influenced participant consumption, saving, and investment behavior in the higher interest rate environment of that era, and they have even larger impacts in a low-return world such as the present. Importantly, we conclude that abandoning these guarantees could enhance old-age consumption for over 80% of retirees, particularly lower earners, without harming consumption during the accumulation phase. Our results are of general interest for other countries implementing default investment options in individual retirement accounts, such as the U.S. 401(k) defined contribution plans and the Pan European Pension Product (PEPP) recently launched by the European Parliament.

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supporting

confidence: 87%

Money-Back Guarantees in Individual Retirement Accounts: Still a Good Deal?

Horneff¹,

Liebler²,

Maurer³

et al. 2019

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“…We exclude workers with weak 13 See Appendix C for more information. The TPP has been, for example, used by Doerrenberg et al (2017) and Dolls et al (2018) who also provide additional information on the data.…”

Section: Sample and Variable Constructionmentioning

confidence: 99%

“…50 See https://www.forschungsdatenzentrum.de/de/steuern/tpp for more information (albeit only available in German) on the TPP data. This data has been, for example, used by Doerrenberg et al (2017) and Dolls et al (2018) who also provide additional information on the data. More detailed information on the construction and use of the TPP is presented in the usage concept available for download (in German only) here: https://www.…”

Section: C1 General Descriptionmentioning

confidence: 99%

Inequality and Income Dynamics in Germany

et al. 2022

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“…In the United States, the Social Security Administration's annual statement, which shows expected social security benefits, caused improvements in knowledge but no changes in behavior (Mastrobuoni, 2011;Carter and Skimmyhorn, 2018). In contrast, the pension statement in Germany, which shows similar information, caused saving to increase by 14 euros on average, an 11 percent increase relative to the sample mean (Dolls et al, 2018). A personalized statement of pension benefits in Chile increased the likelihood of voluntary retirement saving by 1.3 percent (Fajnzylber and Reyes, 2015).…”

Section: Introductionmentioning

confidence: 99%

On Track for Retirement?

Olckers

2020

Preprint

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Over sixty percent of employees at a large South African financial services company select the minimum rate of 7.5 percent for their monthly retirement contributions-far below the recommended rate of 15 percent. I use a field experiment to investigate whether providing employees with a retirement calculator, which shows projections of retirement income, leads to increases in contributions. The average treatment effect is positive but very small and not statistically different from zero.

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Do Retirement Savings Increase in Response to Information About Retirement and Expected Pensions?

Cited by 8 publications

References 14 publications

Money-Back Guarantees in Individual Retirement Accounts: Still a Good Deal?

Money-Back Guarantees in Individual Retirement Accounts: Still a Good Deal?

Inequality and Income Dynamics in Germany

On Track for Retirement?

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