In a typical 401k plan, when you first become eligible you get a big pile of forms and you're told, fill out these forms if you want to join. Tell us how much amount you've saved and how you want to invest the money. In, under automatic enrollment you get that same pile of forms but the top page says, if you don't fill out these forms, we're going to enroll you anyway and we're going to enroll you at this saving rate and in these investments.
This is a short interpretation of the quote. Lorem ipsum dolor sit amet, consectetur adipiscing elit. Curabitur nisl mi, vestibulum quis ligula vel, feugiat finibus risus. Integer quam ligula, consectetur eget ante et, posuere laoreet erat.
This is a more detailed analysis of the quote. Lorem ipsum dolor sit amet, consectetur adipiscing elit. Curabitur nisl mi, vestibulum quis ligula vel, feugiat finibus risus. Integer quam ligula, consectetur eget ante et, posuere laoreet erat. Aenean sit amet erat sed elit consectetur tincidunt. Praesent sed quam placerat, egestas magna a, vestibulum nisi. Proin cursus elit lorem, in laoreet tellus tristique eu. Nunc vel tortor luctus, venenatis lectus sit amet, ultricies velit. Proin tincidunt hendrerit elit nec sagittis. Donec ut dictum risus.
Etiam sollicitudin magna vitae neque efficitur, in ullamcorper nibh tempus. Aenean laoreet facilisis ex sit amet vehicula. Vestibulum placerat velit in eleifend feugiat. Nullam vulputate sed odio vel vestibulum. Etiam pellentesque, arcu sed accumsan aliquet, risus neque interdum mauris, non vulputate nulla purus a est. Duis lacus metus, scelerisque ut justo vitae, dignissim ullamcorper massa. Duis tempor pharetra sagittis. Nam et aliquet metus.eet erat.
People worry that if they buy an annuity and then die before the policy starts to pay off, their heirs will lose out. I tell them, "What you should be more worried about is if you outlive your money, you will have to move in with your kids. Ask your kids which of these outcomes they are more worried about."
So, what's a nudge? A nudge is some small feature of the environment that attracts our attention and alters our behavior.
Rip Van Winkle would be the ideal stock market investor: Rip could invest in the market before his nap and when he woke up 20 years later, he'd be happy. He would have been asleep through all the ups and downs in between. But few investors resemble Mr. Van Winkle. The more often an investor counts his money - or looks at the value of his mutual funds in the newspaper - the lower his risk tolerance.
There's no reason to think that markets always drive people to what's good for them.
A good rule of thumb is to assume that everything matters.
The lesson from behavioral economics is that people only save if it's automatic.
Subscribe and get notification from us