Choosing to contribute a portion of future salary increases towards savings

Salary-earners can be offered a program in which a decision is made today to contribute a portion of their future salary increases towards a select savings account

Salary-earners can be offered a program in which a decision is made today to contribute a portion of their future salary increases towards a select savings account (e.g., retirement, education, general savings, …). By committing salary raises, individuals avoid having to contribute current income that is affected by loss aversion and present bias. Such an intervention can be exercised among the salaried class who earn regular wages and own accounts at commercial banks.

Behavioral tools:

Commitment: Using commitment to increase intangible cost of failure to act according to one’s public commitment.

Active choice: Requiring individuals to affirmatively choose between options and make implicit choice.