Small Cues Change Savings Choices
Small Cues Change Savings Choices
7 July, 2020 •Similar Articles
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We present evidence from field experiments that savings choices are significantly affected by numerical cues in the environment, even when these cues are at best minimally informative. We randomized the one- or two-sentence savings cues present in emails to employees about their 401(k) savings plan. High savings cues increased 401(k) contribution rates by up to 2.9% of income in a pay period, and low savings cues decreased 401(k) contribution rates by up to 1.4% of income in a pay period. Cues affected 401(k) contribution rates for up to a year after the email.