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A low stock of savings increases vulnerability to economic shocks.
Some companies find that linking savings increases to pay increases puts a burden on their payroll and human resource departments.
But should the market plummet the day after your retirement party, or even in the first years after, the risk that you will outlive your savings increases sharply.
New features like automatic enrollment, tying savings increases to wage increases and offering professional management of retirement accounts make 401(k) plans as effortless as defined-benefit pension plans.
Indeed, companies need not wait until 2008 to institute auto enrollment, automatic savings increases and defaulting a new participant into a fund other than a low-yield money market fund.
The system would automatically enroll workers, tie savings increases to raises, include provisions for health care needs, offer objective investment advice to help them plan, and assure a lifelong income base by automatically converting some of their savings to a low-cost annuity at retirement.
Similar(46)
"To the extent that prices don't fall, these savings increase long-distance profits.
Such cost savings increase productivity as companies generate more goods and services with fewer workers.
The Commerce Department reported that personal savings increased 1percentt in November compared with 0.7percentt in October.
Savings increased to an annual rate of $355.6 billion, lifting the saving rate to 3.3percentt from 2.8percentt in August.
Gross "collections" of the savings increased at an annual rate of 17% during the 1990s.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com