Helping employees save for retirement

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Behavioral finance researchers have come up with some ways to get around procrastination and inertia to help workers maximize their retirement plans without even trying.

I’m Sheyna Steiner with the Personal Finance Minute.

One way plan administrators get workers to save is with automatic enrollment — that way people have to opt out rather than taking the step of opting in. Before automatic enrollment only about 30 to 40 percent of workers offered 401(k) plans would opt in, after it’s instituted, plan participation is typically around 90 to 95 percent.

But that’s not all, plan administrators can also choose default investment options that could hypothetically be good enough to get you to retirement. It’s a bit of a double edged sword in that once participants are in the default investments; they’re more reluctant to choose other options.

With employee agreement, employers can also boost worker contributions every year to maximize savings.

In the future, the withdrawal process at retirement could also be automated.

For more on this and other retirement and investing issues, visit, I’m Sheyna Steiner.