How Do Retirement Income Projections Affect
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.