Using several versions of e-mails to retirement plan participants, researchers at Yale University conducted experiments to determine if certain written cues would affect the saving behavior of participants. The e-mails reminded participants of the employer match and how much the participant had contributed so far in the year, and allowed the researchers to study the impact of specific wording and examples on saving rates.

The researchers concluded that small numerical cues can, indeed, influence retirement plan contributions. Contribution rate increase examples, when relatively low, decreased contribution rates up to 1.5% of income. When high, rates rose by almost 3% of income. They also found that an example of a high savings goal increased contribution rates by up to 2.2% of income. And when a higher savings threshold was used as an example, contributions rose

up to 1.5% of income. Lastly, when the maximum permissible contribution rate was presented as an example, contributions rose by almost 3% of income.

Small Cues Change Savings Choices from Yale University is available at

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