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How ‘Fresh Start’ Framing Can Boost Retirement Savings

Practice Management

With past behavioral economics research demonstrating that nudges can be a potent tool for increasing savings rates, the results of a recent study suggest that fresh start framing can be an effective nudge.

In “Using Fresh Starts to Nudge Increased Retirement Savings,” John Beshears of Harvard University and NBER; Katherine Milkman of the University of Pennsylvania; and Hengchen Dai and Shlomo Benartzi of the UCLA Anderson School of Management conducted a field experiment among more than 6,000 university employees to study the effect of framing future moments in time as new beginnings, or fresh starts.

The idea behind the research is that framing the future time point in relation to a fresh start date—such as a participant’s birthday or the first day of spring—would increase the likelihood that the participant would choose to increase his or her contributions at that future time point, without decreasing the likelihood of increasing contributions immediately. 

Contributions Increased 

As part of an experiment, participants received mailings offering an opportunity to choose between increasing their plan contributions immediately or at a specified future point in time.

Interestingly, even though the relatively greater attractiveness of the future opportunity caused by fresh start framing might be expected to decrease take-up of the immediate savings opportunity, the results suggest that such a decrease did not occur. In fact, fresh start framing increased retirement plan contributions following the mailing. 

“We found that compared to mailings that described the future savings opportunity without reference to a temporal landmark (e.g., ‘in 2 months’), mailings that described the future savings opportunity as occurring shortly after a fresh start date (e.g., ‘after your next birthday’) increased take-up of the future savings opportunity,” Beshears, Dai, Milkman and Benartzi write. 

Moreover, they add that fresh start framing appeared to increase cumulative savings contributions over the eight months following the mailing by roughly 25% more than other mailings sent during the experiment. 

The study also found, however, that placebo mailings that linked the future savings opportunity to “control” temporal landmarks not typically associated with new beginnings—such as Thanksgiving, Martin Luther King Day or Valentine’s Day—did not have positive effects on the take-up of the future savings opportunity or cumulative savings contributions over the period. 

Promoting Self-Improvement

Noting that many experts are concerned that savings rates are too low, Beshears, Dai, Milkman and Benartzi suggest that the results highlight the promise of fresh start framing as a “new and effective nudge for encouraging saving.”

The primary contribution of the paper, they note, is that it provides the first affirmative field demonstration of fresh start framing as a means of encouraging self-improvement and promoting behavior change. Another key contribution is that the research establishes how applying fresh start framing to an opportunity to begin future goal pursuit affects immediate decisions about goal pursuit.

For instance,  the researchers explain, framing a future savings opportunity around a fresh start may increase not only the salience of that future savings opportunity, but also the salience of other savings opportunities, including an immediate savings opportunity. 

Additionally, the study observes that construal level theory[1] suggests that fresh start framing conditions led participants to focus on the big picture and think about their savings opportunity at a higher construal level, making goal pursuit more attractive, and therefore, making both immediate and future contribution rate increases more attractive.

Strengths and Weaknesses 

Beshears, Dai, Milkman and Benartzi acknowledge that while their field experiment had many strengths, it also had a few limitations, including, for example, that the

mailings were sent on a single date and invited employees to increase their savings at some point in the next six months, instead of offering opportunities to individuals to change future behavior on staggered dates over the course of a year.
Likewise, the researchers predicted that it would be effective to highlight New Year’s as an opportunity to begin saving, but this particular fresh start date did not produce a noticeable increase in savings. Rather, highlighting the first day of spring and birthdays apparently had the biggest impact.  

“Many individuals may naturally expect New Year’s to serve as an opportunity for a new beginning; thus, highlighting this opportunity may not draw increased attention to the initiation of goal pursuit,” they note. In contrast, individuals may be less likely to view birthdays and the first day of spring as opportunities for new beginnings, so highlighting these opportunities may draw increased attention to goals, the researchers observe.  


[1] Trope, Y., & Liberman, N. (2003), Temporal construal, Psychological Review.