What the end of the penny reveals about retirement savings

New research from Voya’s Behavioral Finance Institute for Innovation finds as digital payments become the norm and physical currency fades from everyday life, retirement savings strategies tied to pennies are losing effectiveness. This research comes as the penny was phased out of production in late 2025, and found that framing retirement contributions in dollar terms — rather than as a percent of salary or as a penny on the dollar — can help make saving feel more straightforward and relevant and can lead to higher savings rates, especially among lower-income workers.¹

The research suggests it may be time for employers to rethink how they talk about saving for retirement, and that doing so could meaningfully improve outcomes for retirement plan participants.

Key takeaways from the research

• Dollars-based framing can drive real impact. In field testing, dollars-based contribution language led to higher savings rates, especially among lower-income workers who are most at risk of falling behind.
• Clear, relatable communication is a powerful tool plan sponsors can use to help more employees save for retirement.
• The penny is losing relevance, and so are penny-based savings messages. As digital payments replace physical cash, traditional “pennies on the dollar” framing no longer resonates with most workers.

The power of simple language

To better understand how framing influences behavior, Voya studied how different ways of describing retirement contributions affected savers.

In a real-world setting, Voya researchers analyzed the behaviors of nearly 11,000 participants in Voya-administered retirement plans. Each participant was randomly-assigned to view one of three retirement contribution frames:

• Option 1: “I would like to save 7% of what I earn” (percent-based)
• Option 2: “I would like to save 7 pennies for every dollar I earn” (penny-based)
• Option 3: “I would like to save $7 for every $100 I earn” (dollar-based)

The results suggested that dollar-based framing language was the easiest to understand and led to more positive action compared to percentage- and penny-based framing. By replacing salary-based percentages with whole-dollar amounts, savings felt more concrete, relevant and achievable. This finding aligns with prior behavioral research showing that people tend to respond better to clear, concrete financial information.

The impact was especially strong among workers earning less than $55,000 annually — a group that has historically faced greater challenges in achieving retirement readiness.²

To take a closer look at the results, under dollars-based framing, these workers saved:

• 13% more than those exposed to percentage-based framing, and
• 10% more than those exposed to penny-based framing.

For someone earning $55,000 a year and saving 15% of their income, a 13% increase in savings translates into approximately $1,072.50 more saved annually — a meaningful improvement driven not by new plan features, but by clearer language.

How we turn research into action for participants 

Based on the findings from this research, Voya has updated its participant experience to reflect dollar-based contribution prompts, expressed as “X dollars per $100 earned.” This clearer framing is now integrated into enrollment and contribution-change moments, where decisions matter most.

Not every employer retirement plan can implement advanced features like automatic enrollment, automatic escalation or personalized investment solutions. But every plan can benefit from clearer and more relevant communication.

By leveraging solutions such as dollar-based framing, employers and benefits leaders can help their employees better understand their choices, feel more confident in their decisions and ultimately improve their financial futures.

About The Behavioral Finance Institute (BeFi)

Dr. Ngnoumen is AVP of Behavioral Finance Research at Voya Financial where she leads behavioral science research and experimentation to help people boost their savings and benefits utilization.

Since its inception in 2016, the Voya Behavioral Finance Institute for Innovation has conducted research focused on improving the financial well-being and outcomes of those it serves. The Institute works with leading scientists and organizations to advance knowledge in areas closely aligned with Voya’s workplace strategy, which is centered on addressing customers’ health, wealth and investment needs through the workplace and institutions.

Learn More