Planadviser

Helping Participants Overcome Savings Biases

By Lee Barney

Amy Ouellette, director of retirement services at Betterment for Business, agrees: “A lot of plans use a 3% deferral rate. That provides a mental anchor for people, essentially telling them that this is a good amount to save. For a lot of people, that rate is simply not going to be enough to get them to the retirement they want. Sponsors’ fears about participants’ resistance to higher savings rates are unfounded. A study by Shlomo Bernatzi found that plans with deferral rates as high as 11% have similar opt-out rates as plans with deferral rates of 6%.”

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This article originally published March 6th, 2019 on Planadviser.

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