Graduation Year

2018

Date of Submission

4-2018

Document Type

Campus Only Senior Thesis

Degree Name

Bachelor of Arts

Department

Psychology

Reader 1

Gabriel Cook

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Terms of Use for work posted in Scholarship@Claremont.

Rights Information

© 2018 Claire S Baxter

OCLC Record Number

1088414236

Abstract

Research in retirement planning has found that people are delaying investing in a retirement plan and are missing out on thousands of potential savings from not investing since 401(k)’s are protected against income taxes. This delay of investment could be occurring as a result of choice overload. The current study examined choice overload in the financial context of 401(k) retirement plans in order to find an efficient solution. Social influences and peer effects have been shown to increase retirement plan participation rates. Participants (n=119) were randomly assigned to a control condition or one of two social preferences conditions, one of which had a heavily skewed social preference while the other had relatively equal preferences. Participants were instructed to build a 401(k) and then were asked questions regarding their financial literacy and overload and satisfaction with their decisions. There was no significant effect of social preferences on overload or satisfaction. However, financial literacy was found to be a negative predictor of satisfaction.

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