Choi, James J.
[Verfasser:in];
Laibson, David I.
[Verfasser:in];
Cammarota, Jordan
[Verfasser:in];
Lombardo, Richard
[Verfasser:in];
Beshears, John
[Verfasser:in]
;
National Bureau of Economic Research
Smaller than We Thought? The Effect of Automatic Savings Policies
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Beschreibung:
Medium- and long-run dynamics undermine the effect of automatic enrollment and default savings-rate auto-escalation on retirement savings. Our analysis of nine 401(k) plans incorporates the facts that employees frequently leave firms (often before matching contributions from their employer have fully vested), a large percentage of 401(k) balances are withdrawn upon employment separation, and many employees opt out of auto-escalation. Steady-state saving rates increase by 0.6% of income due to automatic enrollment and 0.3% of income due to default auto-escalation. Only 40% of those with an auto-escalation default escalate on their first escalation date, and more opt out later