The End of the Penny Is an Opportunity to Rethink Retirement Savings

For years, Americans have been told to save a percentage of their pay for retirement. Savings approaches like “penny-a-day” challenges, which encouraged people to start saving with one penny and then incrementally increase the amount each day, were often used to help people build positive financial habits. Framing what you save as “pennies on the dollar” was also used to lower behavioral barriers to savings.

Today, these strategies risk losing their effectiveness as the economy evolves and pennies lose their everyday relevance. New research from the Voya Behavioral Finance Institute for Innovation showed that as Americans rely more on digital payments and engage less with physical coins, penny-based approaches to retirement saving no longer resonate the way they once did.

In one survey of 1,500 individuals, most people viewed the penny negatively: 75% considered it worthless; 69% thought it was unhygienic; and 58% viewed it as inconvenient. Moreover, 44% said they would discard or give their pennies away, rather than save them. This reinforces how our solutions for helping people save for retirement must adapt to shifts in how people think and behave in relation to money and physical currency.

A Simple Language Nudge

We recently studied how reframing retirement contributions might impact savings, particularly as the penny phased out of production in 2025. When presented with options for saving, the following positioning statements were tested to see if or how they could influence behavior:

• “I would like to save 7% of what I earn” (percent-based);
• “I would like to save 7 pennies for every dollar I earn” (penny-based); and
• “I would like to save $7 for every $100 I earn” (dollar-based).

The results suggested dollar-based framing language was the easiest to grasp and led to more positive actions. Replacing abstract percentages and outdated penny comparisons with whole dollar amounts made savings feel more tangible, more relevant and easier to understand. This aligns with prior research showing that low‑income individuals prefer concrete financial information and that people generally make decisions more readily when considering dollar amounts than abstract percentage

Dollars-Based Framing Drives Better Decisions

In a field experiment with almost 11,000 participants in Voya-administered retirement plans, dollar-based framing led to greater retirement savings than did percentage- and penny‑ based framing. The impact was strongest among lower‑income workers—a group historically more vulnerable to falling behind on retirement readiness.

Under dollar-based framing, those with annual incomes less than $55,000 averaged nearly 13% more in savings than under percent-based framing, and 10% more than under pennies-based framing. For a worker making $55,000 and saving 15% of their income per year, nearly 13% more savings equates to an annual savings increase of approximately $1,072.50 per year.

Research Into Action

Based on this research, Voya updated its participant experience so that contribution prompts now use dollar-based framing (expressed as ‘X dollars per $100 earned’). Participants now encounter this clearer wording when enrolling or adjusting their savings. Communications, marketing and adviser materials are being refreshed to help plan sponsors understand why this framing matters.

The goal is simple: make saving feel easier and relatable for everyone.

Small Changes, Big Difference

Not every employer-sponsored retirement plan can offer features like automatic enrollment, automatic escalation or personalized investments, but every saver can benefit from wording that is relevant and easier to understand. Plan sponsors and their benefits leaders can leverage lightweight solutions like changing how messages are framed to help more employees better understand their savings decisions and improve their financial outcomes.

Christelle Ngnoumen, PhD, is a behavioral scientist and UX research leader with more than a decade of experience studying human decision making and applying behavioral science to improve health and financial outcomes. She currently serves as assistant vice president of Behavioral Science Research at Voya Financial, where she designs and tests behavioral interventions that help individuals make more confident financial decisions.

Previously, Dr. Ngnoumen held senior behavioral science and research roles across HealthTech and FinTech, including Principal Behavioral Scientist at Headspace Health, leading research behind evidence based digital interventions. She earned her PhD in experimental psychology from Harvard University and a BA in psychology from Brown University. She is also a frequent speaker on behavioral design, financial decision making, mindfulness, and the responsible use of emerging technologies such as AI.

This feature is to provide general information only, does not constitute legal or tax advice, and cannot be used or substituted for legal or tax advice. Any opinions of the author do not necessarily reflect the stance of ISS STOXX or its affiliates.