Better Communication Is All It Takes To Get Employees To Save More

piggy bank, window, rainy

Photo: Flickr/bradipo

A new NBER paper by Yale’s James J. Choi and Cade Massey finds that anchors, or subtle hints, affect how much we sock away in our 401(k) savings plans

To test out this theory, the researchers sent two groups of tech company employees an email about their 401(k)s.

The first group received a concise email stating how much they’d saved in their 401(k) and reminding them to take advantage of their company’s match.

The second group received the same email, but with short anchoring messages explaining how much of their company match they were eligible for, suggested savings goals and the maximum possible contribution rate. 

Unsurprisingly, the second email’s cues incentivized its recipients to save more—up to 2.9 per cent of their income versus 1.4 per cent for those who received the first email, the researchers found. 

Now check out 10 things you’re better off buying used > 

NOW WATCH: Money & Markets videos

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.

Tagged In

career yourmoney-us