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Want to save money for retirement? Be careful how you talk to your friends about it
A new study has found that people are more likely to drop out of their 401(k) plans when they find out how much their peers are giving. - photo by Herb Scribner
Youre less likely to save money when you know how much your peers are saving, according to a new study.

The study, which showed participants the 401(k) savings of their co-workers, found that people who knew how much their co-workers invested into their 401(k) savings were less interested in investing money into their own 401(k) plans, according to lead researcher James J. Chois recent piece for The Wall Street Journal.

The researchers, who published their findings in the Journal of Finance, sent an enrollment form to 1,400 workers who werent enrolled in a new 401(k) plan. Some of these workers received a sheet that had information about their co-workers who already signed up for a 401(k) plan, while others did not, Choi wrote.

Those who were given the peer information either didnt sign up or dropped out of their plan altogether. Enrollment rates dropped form 9.9 to 6.3 percent, Choi wrote.

It could be that learning that your peers are ahead of you financially is much more demoralizing than, say, learning that you use more energy than your neighbors, Choi wrote. And when people are demoralized, they tend to disengage from a problem rather than address it.

This surprised the researchers, who thought participants would be encouraged by peer pressure to save, but it proved to have the opposite effect, Choi wrote.

In the end, we concluded that peer information most likely reduced savings because it left the laggards feeling too discouraged, Choi wrote for WSJ. Imagine finding out that not only are you way behind on your financial goals, but nearly everybody around you is way ahead of you. Its easy to see how you might want to avoid thinking about the problem altogether.

This isnt an encouraging finding since American workers arent saving that much money as it is. Time magazine reported that almost one-third of workers dont have any sort of savings, and those that do who are among the ages of 55 to 64 have somewhere between $14,500 saved up.

Similarly, those who have a 401(k) savings dont have much saved either. Time reported that the median amount of savings is at $18,433, with almost 40 percent of those with 401(k) plans having saved less than $10,000, according to Time.

But some research has shown that peer pressure does encourage people to save.

A survey from Merrill Edge, a wealth management company, earlier this year found people were more likely to save money to fit in with people their age, according to Bloomberg. In fact, 61 percent of participants said they were going to save for the future, up from 48 percent who said the same a year ago after taking the survey, Bloomberg reported.

Millennials may especially be influenced by peer pressure when it comes to saving. Aron Levine, head of Merril Edge, said millennials want to save so they can fit in with their peers, Bloomberg reported.

"For younger workers, everything's a constant stream of sharing about what's going on in their life and peers' lives," Levine told Bloomberg. "If they don't seem to be doing as well as everyone else, they don't want to share it, and it adds to stress."

In 2013, a study from the American Institute of CPAs and the Ad Council found that 78 percent of millennials base their spending habits on what their friends do, Daily Finance reported.

In fact, two-thirds of those millennials said they feel pressure to keep up with the types of places their friends eat and the type of gadgets they buy, too, according to Daily Finance.

Millennials have been known to spend more on luxury goods rather than saving because of peer pressure, according to Business Insider. In fact, an American Express Business Insights report found millennials increased their spending on luxury goods by 33 percent in 2011, according to Business Insider.

This is mostly because they feel pressure to spend rather than save, Business Insider reported.

(Millennials are) constantly bombarded with the latest and greatest electronic gadgets, David Bakke, editor of Money Crashers Personal Finance, told Business Insider, and they're also subject to more peer pressure regarding the ownership of these items.