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By Rebecca Moore

New research shows providing employees with retirement income projections may lead them to save more.

However, the findings suggest it was not the income projections alone, but the combined effect of providing retirement planning information along with the balance and income projections, that encouraged an increase in saving.

Researchers at the Center for Retirement Research at Boston College divided a sample population into four groups—a control group and three treatment groups, with each treatment group receiving one of three brochures. The “planning treatment” brochure provided general information about saving for retirement and a step-by-step guide for signing up or changing contributions to a voluntary retirement plan. The “balance treatment” brochure added age-specific projections of how hypothetical additional contributions would translate into additional balances at retirement. The “income treatment” brochure added age-specific projections of how the additional contributions would increase retirement income.

Compared to the control group, individuals in the income group were 1.2 percentage points more likely to change their contributions during the six-month period following receipt of the brochures—5.3% vs. 4.1%. The income group as a whole (including both those who changed contributions and those who did not) increased its retirement saving, on average, by $85 more than the control group; however, considering only the individuals who made a change, those in the “income group” increased their saving by $1,150 more per year than those in the control group.

Relative to the control group, individuals in the other two treatment groups—the “planning group” and “balance group”—were also more likely to change their VRP contributions but did not show a statistically significant increase in the amount of saving.

According to a brief about the research findings, the responses show the income projections had a beneficial, and statistically significant, effect on knowledge and confidence. Compared to the control group, the income group reported less difficulty finding information about how much to save for retirement and being better informed about retirement planning than they were six months prior. They also reported being more certain about their expected retirement income and more satisfied with their financial condition.

However, the report notes, the results show the effect of the income projections on retirement saving was significantly reduced by a difficulty in paying bills, a strong preference for living “pretty much for today,” and a tendency to procrastinate. It was significantly enhanced if the respondent was good at following through. Cognitive ability and financial literacy generally had little effect and in no case a statistically significant effect.

Download the brief.


Moore, R. (2013, April 2). Income Projections Encourage Saving. Retrieved from