Development and Tests of a Model for Inertia in Retirement Decisions

About 50% of Dutch employees think they should do more to understand their financial situation after retirement (Wijzer in Geldzaken, 2015, p. 4). Yet, they postpone decisions about pension and pension adjustment (see also Krijnen, Breugelmans, Zeelenberg, 2014). In the meantime, the Dutch Pension system is economized (the Dutch Witteveen kader), meaning that people will have to consider adjusting their replacement rate and retirement age expectations, and consequently, consider additional savings to maintain their purchase power after retirement. Consequently, all Dutch will to some extent be faced with more choices about their pensions. The consequences of freedom of choice and the fit of the choice architecture of specific pension decisions with human decision making processes should be carefully considered (Ewijk, Mehlkopf, Van den Bleeken and Hoet, 2017; Prast, 2017).

The aim of this project is to activate people to check their retirement savings and take action when needed. To reach this goal we will systematically analyze and test the dispositional inertia of pension plan participants, barriers in the retirement decision making process that might invoke inertia, and interventions that will successfully activate participants. As a result, by the end of this project we will have insight into the dispositional and situational underpinnings of pension inertia. Moreover, pension providers will have the tools to a) identify when people are most likely to become inactive when planning their pensions; b) identify who will be most likely to stay inactive, and c) have the tools to activate people in their retirement decisions.

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Netspar, Network for Studies on Pensions, Aging and Retirement, is a thinktank and knowledge network. Netspar is dedicated to promoting a wider understanding of the economic and social implications of pensions, aging and retirement in the Netherlands and Europe.

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