How To Save For Retirement from Harvard Professor of Economics

Updated : Sep 14, 2019 in Articles

How To Save For Retirement from Harvard Professor of Economics


If you “auto-enroll” people, if you make
it so easy that it happens automatically, you find that you have a 90%
enrollment rate. Only 10% of the American public opts out of the 401(k) plan. So that
tells us that there’s not an aversion to saving. There’s a lot of comfort with
saving, only 10% opt out when you automatically enroll them. Now contrast
that to the opposite regime, where you tell people “hey welcome to the company,
if you want to enroll here’s the phone number”… in that case you only get a 40%
enrollment rate after a year of tenure. So you can take the enrollment rate from
40% to 90% … just by making enrollment so easy that it’s auto
enrollment.

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