OSU study finds retirement education counter-productive

Friday, August 22, 2008

By Emily Kilian, Spears School Communications Intern
 
(STILLWATER, Okla.– Aug. 22, 2008) – Educational efforts by the federal government and private sector partners that encourage American workers to save for retirement are counter-productive, according to a recent study published in the Journal of Consumer Affairs.
 
“We can’t assume people are concerned with their retirement when it is still 40 years away,” said Josh Wiener, professor and head of the OSU Department of Marketing and co-principal investigator for the study. “Retirement seems too abstract and too far off for people to care.”
 
The study discusses a savings crisis, with only two in three Americans saving for retirement in 2007. The study revealed that efforts to address the savings crisis have failed because Americans get overwhelmed with the thought of saving.
 
Wiener and co-principal investigator Tabitha Doescher, president of Cimarron Research Services, suggest that successful pro-savings communications should focus on the positive instead of the fear of retirement, be rich in imagery instead of numerical calculations, ask people to put aside only a small amount and then gradually increase that amount, and emphasize that others are saving and approve of saving.
 
The joint effects of increasing gas and food prices and the decline in both housing values and the stock market make the results of the study even more relevant, Wiener said.
 
“More and more people will simply despair if they think of how they might reach a numerical goal for their future while trying to make ends meet at the present time,” Wiener said. “To encourage retirement, people must think saving a little bit now will set them closer to having a good future.”
 
The study also revealed the average American does not think like a public policy expert. This is important when designing teaching tools on the necessity of saving for retirement.
 
“First, people have to care,” Weiner said. “Then we have to make it easy for them to save by teaching from a different direction, and that is really what the study shows.”