How Do Retirement Income Projections Affect Saving Behavior?

Congress is considering requiring retirement plan sponsors to provide participants of defined contribution plans with information about projected annual income at retirement. Using a large-scale field experiment involving university employees, we find that providing retirement income projections along with general retirement planning information induces individuals to increase their saving for retirement. Our findings suggest that individuals are not perfectly informed about the link between saving today and income in retirement, and that, on average, people tend to overestimate the level of retirement income that current saving generates.