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Many people who start new jobs fail to enroll in employer-offered retirement saving programs, even when the employer offers to match their contributions. It is not clear why they do not take advantage of these plans or what can be done to change that behavior. Researchers are studying the behavior of new hires at six large employers to identify the factors that influence the choice to start saving for retirement. They have found that employees are responsive to employer match incentives in optional plans but with gaps by gender, age, and income group. Automatic saving plans have the highest participation rates and no such gaps.

This issue of Insight summarizes research conducted within the Financial Literacy Center.

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