Can Making Family Salient Increase Retirement Savings? Evidence from a Large-Scale Field Experiment

Many people fail to save for retirement, opting to spend money and consume in the present. Previous work has largely focused on highlighting the long-term benefits that savings can have for the individual. Instead, we test a novel intervention that that frames retirement savings as a way to ‘secure your family’s financial future.’ Using a large-scale field experiment (N=97,149), we find that sending SMS reminders with a family security framing improves contribution rates relative to those in the control group who do not receive an SMS message and other treatment groups who receive SMS reminders based on previously successful behavioral interventions (e.g., basic alerts, pennies-a-day, individual goals, fresh start). Promisingly, contribution rates continue to be higher for those who received the family security SMS even two months following the experiment, despite no other SMS reminders being sent. We combine our analyses with two machine-learning approaches and identify significant heterogeneity in the effectiveness of our treatment. While the family security SMS improves contribution rates by 89% for those over the age of 28, it significantly backfires for younger individuals decreasing contributions by 53%. If the goal is to optimally increase retirement contributions, then accounting for heterogeneity can have clear policy and firm implications. Sending the family security intervention to the entire customer base would decrease the number of contributors, total contribution amounts, and overall firm profits, relative to a segmented approach that sends the intervention only to customers above the age of 28.