Academics who helped pioneer research on 401(k) auto-enrollment find effects such as leakage blunt its long-term impact.
401 plan policies like auto-enrollment and auto-escalation have become popular.Pioneering researchers found that the policies may be less effective than they'd previously thought. However, the effects are still positive, they said.cashing out 401 balances
CEO shares the No. 1 red flag he sees in employees: People who aren't self-aware ‘really struggle with this'Policies like auto-enrollment and auto-escalation aim to boost the size of employees' nest eggs, by automatically enrolling workers in their company 401 and then raising their savings rate over time.About two-thirds of 401 plans were using auto-enrollment as of 2022, according to survey data from the Plan Sponsor Council of America, a trade group.
That's a 72% decrease in effectiveness from the 2.2-percentage-point boost that was extrapolated by the"results of early pioneering papers," the paper said. Additionally, just 43% of workers defaulted into auto-escalation of their savings rates ultimately accepted a higher contribution rate after one year, the National Bureau of Economic Research paper found.
United Kingdom Latest News, United Kingdom Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Column-Are 401(k) matching contributions all they are cracked up to be?Column-Are 401(k) matching contributions all they are cracked up to be?
Read more »
Here's how much money Americans in their 50s have in their 401(k)sMany Americans in their 50s don’t have much saved for retirement, per Fidelity’s latest data. Three strategies to consider, according to a…
Read more »
Here’s how much money Americans in their 50s have in their 401(k)sMany Americans in their 50s don't have much saved for retirement, per Fidelity's latest data. Three strategies to consider, according to a retirement expert.
Read more »
What short-term market volatility means for your 401(k)Widespread fears of a U.S. recession sent global markets tumbling Monday, with the Dow Jones Industrial Average falling by over 1,000 points in midday trading. Here's what it means for your 401(k).
Read more »
What you should do with your 401(k) in a highly volatile marketIf you're investing in a 401(k), daily market dramas are no reason to take dramatic actions with your portfolio.
Read more »
What you should do with your 401(k) in a highly volatile marketFor individual investors, the quick-turn global rout in stocks on Monday was unsettling, despite news Tuesday that stocks staged a rally.
Read more »