A Laboratory Study of the Eﬀect of Financial Literacy Training on Retirement Savings
We report results from an economics experiment that examines the role of ﬁnancial literacy in retirement savings. In the experiments, participants make decisions in a retirement savings game, in which income during working years is uncertain. Participants are nudged to varying degrees with automatic savings in each period of the game. Some participants receive ﬁnancial literacy training in the form of training to compute the expected savings needed at retirement to smooth consumption over the entire life cycle. We ﬁnd evidence that literacy increases savings and improves eﬃciency. Our ﬁnding has implications for choice architecture for retirement savings.