April 14, 2013
AS WE TRANSITION TO A DEFINED CONTRIBUTION SAFETY NET...:
Should the Government Force You to Save More? (Mitch Tuchman, 4/12/13, Forbes)
[The president of Fidelity Investments, Ronald] O'Hanley argued in a speech that workers should be required by default to set aside 6% of their earnings for the long term. Legislation passed in 2006 made 3% the "default" rate for 401(k) plans, a level from which workers can opt-out."The proverbial four-legged stool -- consisting of Social Security, traditional pension plans, defined contribution plans and personal savings -- is wobbly at best, and by and large does not exist for most Americans," O'Hanley said, although he believes the opt-out clause should remain.
...government will simply do the savings for us, via devices like O'Neill accounts. The reality is that it costs less in the long run to fund your welfare up front, when you're young and the money will build, than on the back end.
Posted by Orrin Judd at April 14, 2013 8:51 AM
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