How to Save More For Retirement Without Really Trying

Today’s column from the excellent Jason Zweig:

How to Save More For Retirement Without Really Trying

[Click the link above to read the entire article]

A highlight or two:

• When people want to save but can’t bring themselves to do it, their retirement funds need to do the saving for them—automatically.

• At companies that use automatic enrollment, an average of 83% of workers are saving, says consultant Aon Hewitt

• While automatic enrollment has brought millions of new savers into 401(k)s, most employers set the default contribution rate at 3%—and, because of inertia, most workers leave it there.

Of course, most of this is relevant only for those designing 401(k) plans – generally employers and the consultants who work for them.

For the individual, the story is easier: Make sure you are taking advantage of your 401(k) (or, if you don’t have one or if it’s not great, any other retirement savings opportunities you have).  And while frequent trading and mucking about with it isn’t a good plan, it needs to be reviewed regularly and if possible, contributions likely need to be increased as you are able.

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