How Do Emotions Influence Saving Behavior?
The brief’s key findings are:
- A recent experiment tested how retirement saving is affected by two emotions:
- hope (the degree of yearning for a secure retirement); and
- hopefulness (the perceived likelihood of a secure retirement).
- The experiment “threatened” these emotions by telling some participants that the chances of a secure retirement were worse than expected.
- Responses to the threat differed; compared to the relevant control group,
- those with high hope shifted their hypothetical portfolio toward equities.
- those with high hopefulness were more likely to join a hypothetical plan.
- those with low hopefulness were less likely to join a plan.
- These behavioral responses suggest that communication about retirement saving needs to be tailored to the characteristics of the individual.