The Importance of Default Options for Retirement Savings Outcomes: Evidence from the United States

John Beshears, James J. Choi, David Laibson, Brigitte C. Madrian

NBER Working Paper No. 12009
Issued in February 2006, Revised in March 2007
NBER Program(s):Economics of Aging, Economic Fluctuations and Growth, Public Economics

This paper summarizes the empirical evidence on how defaults impact retirement savings outcomes. After outlining the salient features of the various sources of retirement income in the U.S., the paper presents the empirical evidence on how defaults impact retirement savings outcomes at all stages of the savings lifecycle, including savings plan participation, savings rates, asset allocation, and post-retirement savings distributions. The paper then discusses why defaults have such a tremendous impact on savings outcomes. The paper concludes with a discussion of the role of public policy towards retirement saving when defaults matter.

A non-technical summary of this paper is available in the NBER Bulletin on Aging and Health. You can sign up to receive the NBER Bulletin on Aging and Health by email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w12009

Published:

• in "Lessons from Pension Reform in the Americas," Kay, Stephen J. and Tapen Sinha (eds.) Oxford: Oxford University Press, 2008.
• The Importance of Default Options for Retirement Saving Outcomes: Evidence from the United States, John Beshears, James J. Choi, David Laibson, Brigitte C. Madrian. in Social Security Policy in a Changing Environment, Brown, Liebman, and Wise. 2009