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Using vignettes to improve understanding of Social Security and annuities

Published online by Cambridge University Press:  14 May 2021

Anya Samek ,
Arie Kapteyn Open the ORCID record for Arie Kapteyn [Opens in a new window]  and
Andre Gray
Anya Samek*
Affiliation:
University of California, San Diego, San Diego, CA, USA National Bureau of Economic Research, Cambridge, MA, USA
Arie Kapteyn
Affiliation:
National Bureau of Economic Research, Cambridge, MA, USA University of Southern California, Los Angeles, CA, USA
Andre Gray
Affiliation:
University of California, San Diego, San Diego, CA, USA
*
*Corresponding author. Email: [email protected]
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Abstract

Evidence shows that people have difficulty understanding complex aspects of retirement planning, which leads them to under-utilize annuities and claim Social Security benefits earlier than is optimal. To target this problem, we developed vignettes about the consequences of different annuitization and claiming decisions. We evaluated our vignettes using an experiment with a representative online panel of nearly 2,000 Americans. In our experiment, respondents were either assigned to a control group with no vignette, to a written vignette, or to a video vignette. They were then asked to give advice to hypothetical persons on annuitization or Social Security claiming, and were asked factual questions about these concepts. We found evidence that being exposed to vignettes led respondents to give better advice. For example, the gap between advised claim age for a relatively healthy person versus a relatively sick person was larger by nearly a year in the vignette treatments than in the control group. Furthermore, the vignettes increased financial literacy related to these concepts by 10–15 percentage points. Interestingly, the mode of communication did not have a significant impact – the video and written vignettes were equally effective.

Keywords

Social Securityannuitiesconsequence messagingonline surveyexperimentD14C90C83
Type
Article
Information
Journal of Pension Economics & Finance , Volume 21 , Issue 3 , July 2022 , pp. 326 - 343
Copyright
Copyright © The Author(s), 2021. Published by Cambridge University Press

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