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- Title
The Impact of Behavioral Economics on Retirement Plans.
- Authors
Austin, Rob
- Abstract
Throughout the retirement process, individuals are in a continuous state of making decisions. From deciding when to start deferring money to a 401(k) plan, to figuring out how retirement money should be invested and when to rebalance, to choosing which date to commence Social Security benefits, we are always making choices. Wherever there is choice, behavioral economics plays a role. This article introduces concepts of behavioral economics and discusses their impact on retirement plans. It draws on research from noted behavioral economists to showcase not only what "irrational" retirement decisions we make, but also how employers are combating them through automation features, premixed portfolios and the like. Finally, it concludes with how behavioral economics principles can be applied to create future 401(k) features.
- Subjects
401(K) plans; PENSIONS; BEHAVIORAL economics; SOCIAL security; DEFERRED compensation; RETIREMENT planning
- Publication
Benefits Quarterly, 2013, Vol 29, Issue 3, p25
- ISSN
8756-1263
- Publication type
Article