Tax Misperceptions and the Effect of Informational Tax Nudges on Retirement Savings

Despite subjects being informed about tax rules before making saving decisions, we find—using laboratory experiments—that deferred taxation results in after-tax pensions that are approximately 25% lower compared with an economically equivalent immediate pension-tax system. This indicates substantial tax misperceptions. For subjects with low tax knowledge, tax misperceptions remain stable, even if they have gained experience. Tax misperceptions nearly disappear for all subjects only if we provide recurrent numerical informational pension-tax nudges and if subjects have gained experience. We demonstrate that replacing the tax-deductibility of retirement savings with government matching contributions increases after-tax pensions above the level under immediate taxation without the need to provide informational tax nudges. This paper was accepted by Yuval Rottenstreich, decision analysis.

• 저널Management Science · 67(8) · 5011–5031
• 토픽Financial Literacy, Pension, Retirement Analysis · Accounting
• DOI10.1287/mnsc.2020.3761
• 저자Kay Blaufus, Michael Milde