Thursday, February 25, 2016

Carrots alone don't get people to save for retirement

Here’s a nice little article in Business Day in the New York Times February 24, 2016, “Nudges aren’t enough to solve society’s problems”, by Eduardo Porter. The main focus of the article concerns getting people who don’t make high enough wages on the job to still continue saving for retirement in IRA’s, which “carrots” only (no sticks), particularly in an environment where few companies offer defined benefit programs any more.  There is a problem in that lower income people are more focused on their near term well being, and often don’t develop the cognition to think about their futures (into old age) strategically.  They expect to depend on “family”.  Somehow the title of the article reminds me of the little movie “The Mudge Boy”, “M” instead of “N”. 

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