Richardcyoung.com

The Online Home of Author and Investor, Dick Young

  • Home
  • How We Are Different
  • About Us
    • Foundation Principles
    • Contributors
  • Investing
    • You’ve Read The Last Issue of Intelligence Report, Now What?
  • Your Survival Guy
  • The Great Reset
  • COVID-19
  • My Rifles
  • Dividends and Compounding
  • Your Security
  • The Swiss Way
  • Dick Young
  • Debbie Young
  • Key West
  • Paris
  • Dick’s R&B Top 100
  • Liberty & Freedom Map
  • Bank Credit & Money
  • Your Survival Guy’s Super States
  • NNT & Cholesterol
  • Work to Make Money/Invest to Save Money
  • Your Health
  • Ron Paul
  • US Treasury Yield Curve: My Favorite Investor Tool

Gov. Hurts

July 11, 2011 By E.J. Smith - Your Survival Guy

According to a Wall Street Journal analysis, a 2006 law allowing companies to automatically enroll employees into a 401(k) was intended to encourage them to save for retirement. But instead of encouraging employees to save more, the law is having the opposite effect. This type of auto-enrollment policy was popularized by Cass Sunstein, a Chicago University Law School professor, in his book Nudge. Today Mr. Sunstein works for the Obama administration as the Administrator of the Office of Information and Regulatory Affairs. 

So much for the “nudge” helping out, since, according to the analysis 40% of new hires with automatic enrollments are saving less money than if they had been left alone and allowed to enroll on their own. The reason: the majority of companies set the contribution rates at 3% of salary or less. That’s well below the 5% to 10% contribution rates participants typically elect when left to enroll on their own. And thanks to inertia, the low contribution rates from the auto-enrollment tend to remain low.

Companies claim the reason they keep the default contribution rates so low is because they don’t want employees dropping out of the plan. But there is another, more realistic, reason too. According to a 2011 Aon Hewitt survey, 73% of employers opt not to increase the default contribution rate higher because of the increased cost of the employer match. And that’s how too much government hurts middle-class savers.

Related Posts

  • An Inside Look: Healthcare.Gov Meetings
  • Midterms: Obamacare Hurts
  • Healthcare.gov a Magnet for identity Thieves
  • Author
  • Recent Posts
E.J. Smith - Your Survival Guy
E.J. Smith is Founder of YourSurvivalGuy.com, Managing Director at Richard C. Young & Co., Ltd., a Managing Editor of Richardcyoung.com, and Editor-in-Chief of Youngresearch.com. His focus at all times is on preparing clients and readers for “Times Like These.” E.J. graduated from Babson College in Wellesley, Massachusetts, with a B.S. in finance and investments. In 1995, E.J. began his investment career at Fidelity Investments in Boston before joining Richard C. Young & Co., Ltd. in 1998.

E.J. has trained at Sig Sauer Academy in Epping, NH, NH, where he completed course-work in Practical and Defensive Handgun, Conceal Carry Pistol, Shotguns, Precision Scope Rifle and Kidnapping Prevention.

E.J. plays a Yamaha Recording Custom drum set with Zilldjian cymbals. His first drum set was a 5-piece Slingerland with Zildjians. He grew-up worshiping Neil Peart (RIP) of the band Rush, and loves the song Tom Sawyer—the name of his family’s boat, a Grady-White Canyon 306. He grew up in Mattapoisett, MA, an idyllic small town on the water near Cape Cod. He spends time in Newport, RI and Bartlett, NH—both as far away from Wall Street as one could mentally get. The Newport office is on a quiet, tree lined street not far from the harbor and the log cabin in Bartlett, NH, the “Live Free or Die” state, sits on the edge of the White Mountain National Forest. He enjoys spending time in Key West and Paris.

Please get in touch with E.J. at ejsmith@yoursurvivalguy.com

Click here to sign up for my free monthly Survive & Thrive letter.
Latest posts by E.J. Smith - Your Survival Guy (see all)
  • Early Advice from Her Dad on Tipping at Charlie Trotter’s - February 2, 2023
  • Reagan’s America Remembered by Your Survival Guy and More - February 1, 2023
  • Tom Brady Retires, Again. Should You? - February 1, 2023

Dick Young’s Must Reads

  • Meet Me at Freddy’s June 2022
  • “The Losses are Taking a Toll on Their Health”
  • California’s Progressive Liberals Have Created a Monster
  • Your Survival Guy at Fidelity and Your RMD Compliance
  • The Case for Individual Stocks: Now More than Ever
  • The Butterfly Effect and Chaotic Markets
  • TROJAN HORSE: “Diversity, Equity, and Inclusion” is Critical Race Theory in Disguise
  • The Problem in America
  • America’s States Rights Revolution
  • Soros’s Open Society Foundation, Charles Koch Team Up

Our Most Popular Posts

  • Will Western Tanks Be a Game Changer in Ukraine?
  • Warren Miller: If You Don’t Do It This Year, You’ll Be…
  • Europe Should Protect Itself
  • “I Will Veto Everything They Send Me”
  • How to Fight Wokism Idiocy
  • US Debt Now Exceeds Annual GDP?
  • The Neocon Russia-Hoaxers of Hamilton 68 Must Be Held Accountable
  • Why Don’t These Mayors Seem to Care?
  • What Kind of Life Are You Investing For?
  • Pfizer CEO Terrified of Real Questions About His Vaccines

Disclosure

RSS Youngresearch.com

  • Early Advice from Her Dad on Tipping at Charlie Trotter’s
  • Do You Trust This Rally?
  • Reagan’s America Remembered by Your Survival Guy and More
  • What Happens if the “Fed Put” Is Over for Good?
  • Tom Brady Retires, Again. Should You?
  • What Kind of Life Are You Investing For?
  • Warren Miller: If You Don’t Do It This Year, You’ll Be…
  • Are the Realists Winning the Debate over the Future of EVs?
  • CATO: Global Freedom Is in Sharp Decline
  • Biden Administration Destroying Retiree Fiduciary Protections

RSS Yoursurvivalguy.com

  • Early Advice from Her Dad on Tipping at Charlie Trotter’s
  • Treasury Bonds Ready to Rock and Roll
  • Survive and Thrive February 2023: 4 Life Changing Words: “You Should Try This”
  • Tom Brady Retires, Again. Should You?
  • Reagan’s America Remembered by Your Survival Guy and More
  • America’s Unprecedented Debt Problem
  • Iran’s Ballistic Missiles Could Give Russia the Edge in Ukraine
  • What Kind of Life Are You Investing For?
  • Why Don’t These Mayors Seem to Care?
  • Tactical Laser Weapon Achieves “First Light”

Breaking News: Reform at New College, Sarasota, Florida

German Opposition Leader Denounces the Country’s “Insane Drunkenness about War”

Early Advice from Her Dad on Tipping at Charlie Trotter’s

What Is Trump’s Argument for Election in 2024?

Powell Slows Fed Funds Rate Increases

Canadian Grain Harvest Drives Railroad Income Gains

Copyright © 2023 | Terms & Conditions | About Us | Dick Young | Archives