Are pay-as-you-go public pension systems sustainable?
The problem is uniquely different in the United States, because America’s “trust fund” system of financing Social Security will create a crisis when the fund is exhausted. Though the options at that time will be different from the choices facing other governments, policies to avoid the US crisis are relevant to other countries that confront population aging.
Global Aging and fiscal policy
By: Martin Feldstein – Harvard University
Can people be nudged to save more for their retirement?
Yes, argue Dolls and al. Their research evaluates a policy the German pension administration initiated in 2005 and consisted of sending out annual letters providing detailed and comprehensible information about the pension system and individual expected public pension payments. Using German tax return data they find that the letter actually lead to an increase in tax-deductible private retirement savings!
Do Retirement Savings Increase in Response to Information About Retirement and Expected Pensions?
Authors: Mathias Dolls, Philipp Doerrenberg, Andreas Peichl, Holger Stichnoth
From: CESifo
Are all nudges created equal?
Anderson and Robinson via a financial literacy survey found that in Sweden pension investors can be divided into three categories: those who are financially literate, those who mistakenly believe they are financially literate, and those who know that they are not. Upon receiving informational nudges it’s the investors with mistaken beliefs who responded to the nudge, and were more likely to work with mass-market advisors who steered them into high fee funds and ended up underperforming. For the other two groups nudges didn’t work. They stayed away from advisors and accumulated retirement savings more quickly!
Who Feels the Nudge? Knowledge, Self-Awareness and Retirement Savings Decisions
Authors: Anders Anderson, David T. Robinson
From: Stockholm School of Economics, Duke University
