Effective Financial Decision Aids

The National Defense Authorization Act for FY 2016 directs the Secretaries of the Armed Forces and the Chiefs of Staff of the Armed Forces to provide financial literacy training to Service members at certain critical points throughout their careers, including the transition to retirement. Based on a review of the literature, we find that general financial training is ineffective. More effective are decision aids that provide assistance at the time the decision is being made. This paper provides a discussion of what such a decision aid would entail.