Reducing the wait: Temporal discounting as the key mediator in effective personalized retirement projections

Previous research has shown through experiments that personalized pension projections effectively promote retirement financial preparation, yet the mechanisms driving this success remain unexplored. This knowledge gap limits opportunities to optimize and innovate such projections. The present study addresses this shortfall by examining the effects and underlying processes of personalized pension projections in a sample of middle-aged working adults in Hong Kong (N = 400). Using a three-arm randomized controlled trial, participants were randomly assigned to one of three conditions: (A) standard personalized pension projection, (B) upgraded personalized pension projection incorporating a new component (‘identifying feasible plans for an ideal retirement’), or a control group. Key outcome and mediator variables were measured at baseline and two follow-ups. Results revealed short-term improvements in retirement financial preparation from personalized projections. Both the standard and enhanced versions reduced temporal discounting, which mediated increases in financial preparation for retirement. By elucidating these operational mechanisms, our findings open new pathways for refining personalized pension projections, offering innovative and powerful strategies to enhance retirement planning interventions.