Capital Ideas - Summer 2013 - page 44

Summer 2013 | Capital Ideas
by Shlomo Benartzi and Richard H. Thaler
any countries are facing a retirement savings
crisis. In the United States, for example, the
fraction of workers at risk of having inadequate
funds to maintain their lifestyle through retirement
is estimated to have increased from 31 percent to 53
percent from 1983 to 2010. Roughly half of
US employees (78 million) have no access
to retirement plans at their workplace. For-
tunately, there are solutions to these prob-
lems. We simply have to change the choice
architecture of retirement plans by utiliz-
ing the findings of behavioral economics
research and make such plans available to
all workers. We describe a large-scale field
demonstration of the potential impact of
such research-based changes in how we
This article is reproduced with some modi-
fications from “Behavioral Economics and
the Retirement Savings Crisis” by Bena-
rtzi &Thaler, SCIENCE 339:1152–1153
(2013). Reprinted with permission from AAAS.
Behavioral economics and
the retirement savings crisis
“Making a payroll-
based savings
plan available
to everyone is
essential because
it is the most
effective way for
the middle class
to save.”
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