U.S. policymakers should take behavioral research into account when developing strategies for coping with the aging of the population.
Peter Orszag, director of the Congressional Budget Office, made that argument recently during a presentation to participants in a retirement conference.
Orszag noted, for example, that one proposal calls for automatically annuitizing a substantial portion of employees’ 401(k) plan accounts. The annuitization rules would permit employees opt out of annuitization within 2 years after starting to receive payments, Orszag said.
Another strategy might be to increase employees’ 401(k) plan savings rate whenever they receive raises, Orszag said.
Simply giving consumers more, direct information about health care prices could help hold health care costs down, Orszag said, citing research that posting the after-tax prices of products in a grocery store along with the pre-tax prices cut sales 8%.