Borrow Less Tomorrow: Behavioral Approaches to Debt Reduction

Dean Karlan and Jonathan Zinman

Mounting evidence suggests that behavioral factors depress wealth accumulation. Although much research and policy focuses on asset accumulation, for many households debt decumulation is more efficient. Yet the mass market for debt reduction services is thin. So we develop and pilot test Borrow Less Tomorrow (BoLT), a behavioral approach to …Learn More

Temporal Distance to Retirement and Communication Framing: Enhancing Retirement Financial Decision Making

Nicole Votolato Montgomery, Lisa R. Szykman, and Julie R. Agnew

Based on temporal construal theory, the length of time a person has before they reach retirement age will influence how they react to different types of messages. This theory predicts younger workers prefer more abstract communications compared to older workers who should prefer more concrete information because retirement is a …Learn More

Developing and Disseminating Financial Guidelines for American Households

William G. Gale and Benjamin H. Harris

Household financial planning can be challenging and household members often lack basic financial literacy skills. This paper discusses the potential and pitfalls of one approach to solving these problems—the development and dissemination of financial guidelines simple enough to be explained in graphic form. The discussion is motivated by the history …Learn More

What People Know about Target-Date Funds: Survey and Focus Group Evidence

By Julie R. Agnew, Lisa R. Szykman, Stephen P. Utkus, and Jean A. Young

Making portfolio allocation decisions can be difficult for American households who lack interest or experience in financial matters. Service providers and 401(k) plan sponsors have introduced new plan design approaches and investment products, such as target-date funds, that can simplify savings and investment choices for defined contribution (DC) plan participants…Learn More

Financial Literacy: What Works? How Could It Be More Effective?

By William G. Gale and Ruth Levine

This paper highlights the extent and effects of financial illiteracy on American households, reviews previous efforts to promote financial literacy, and discusses new directions for such initiatives. None of the traditional approaches to financial literacy has generated strong evidence that financial literacy efforts have had positive and substantial impacts… Learn More