Group 17

Aranya Das
Gourav Bagmar
Nakul Verma

09
16
40

Ways to force individuals in the age group 22-30 to save money for retirement:
1. Simulation Strategy: When companies educate their employees about importance of
savings, they should use a simulation technique where in the cost of living of an
individual is identified and their values are projected say after the individuals retirement
using inflation rates and other macro-economic data.
Also, Facial Retirement technique should be used, wherein the employees would be
shown how they would look at ages 69, 79 and 89 etc. along with the rising cost of living.
This would lead to an emotional attachment to their future self and would encourage
them to save more.
2. Auto-Escalation strategy: When the employees appoint a Financial Planner for
themselves, the FPs should ask them to fill a form wherein the initial savings rate would
be specified and along with pay rise the savings rate will also rise at a default rate in
proportion to the increment in the salary. This would be a good strategy, as the pay rise
(%) is more in the initial part of an individuals career. This auto debit facility would
ensure that the individuals tend to save more unknowingly.
3. Default Scheme: The employees can be asked to select a savings plan customized to
their needs and if they fail to update they should be directly enrolled for a default plan.
They would be given a chance to opt out of the default scheme if they feel the need to
do so.
4. Leverage Social Proof: People tend to make the same decisions as a group with which
they identify. Individuals should be shown videos and sent reminders and alerts on their
colleagues success stories on financial planning and savings. Thus, individuals who are
reluctant to save for retirement can be incentivized to do so by using peer pressure.
5. Celebrity Endorsements: Paying a celebrity to endorse a product is a time-honored
marketing tradition. So whenever a financial institution comes up with a new Savings
Plan, they should have it endorsed by a celebrity say of age 25-30, this could create an
impact on individuals as many of them look up to these celebrities as their role models.