Can We Increase Retirement Saving?

IB#16-15

The brief’s key findings are:

  • Today’s workers must save on their own for a secure retirement, so researchers have examined existing options for encouraging them.
  • Tax incentives: recent research suggests that increasing the generosity of tax incentives for 401(k)s and IRAs would not significantly increase saving.
  • 401(k) design: auto-enrollment has boosted participation, but, to date, low default contribution rates and little auto-escalation have dampened the rise in saving.
  • Auto-IRAs: recently adopted by some states, they would require employers without a plan to enroll their workers in an IRA, with the ability to opt out.