Encouraging working adults to save for retirement is challenging due to temporal discounting, a psychological disconnect from the future, and an emphasis on immediate financial needs. This research implemented a pioneering three-component intervention designed to increase private retirement savings among 220 working adults in Hong Kong. The intervention comprised innovative financial education, personalized pension projections (PPP), and nudging techniques. In the financial education component, we transformed traditional methods by helping participants grasp the true value of money in the Hong Kong economy and the disconnect between income and labor participation, thereby strongly motivating retirement savings. The PPP segment utilized Python to create vivid visual representations of various future retirement scenarios based on different financial strategies, illustrating that while success in investing for retirement is uncertain, not participating ensures a loss. For the nudging component, participants were encouraged to leverage the benefits of different bank accounts to start or increase their savings immediately, keeping management costs low. We conducted a full factorial experiment with eight conditions to assess the short-term effects of the intervention, including the mechanisms and interactions of each component. The baseline pre-test has been completed, and a six-month post-intervention assessment will be completed at the end of November 2024. Final results will be available before January 2025 and, if accepted, reported at ACP2025.

Authors:
Alex Yue Feng Zhu, The Education University of Hong Kong, Hong Kong

About the Presenter(s)
Dr Alex Yue Feng Zhu
Assistant Professor, The EDUHK
Research interests: behavioral finance, personal finance, experimental finance
Projects: IFEC(HK) financial education research fund (2022-2023), HK Gov Public Policy Research Scheme (2023-2025)

See this presentation on the full schedule – Friday Schedule

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