October 22, 2017

THUS UNIVERSAL HSAs:

Jack Bogle and Nobel winner Richard Thaler both know this one thing about smart investing ; A nudge is great, but sometimes, the best thing to do is nothing (MITCH TUCHMAN, 10/21/17, Marketwatch)

Thaler and Sunstein make a relatively simple argument based on years of economic research about human biases. We are full of flaws forcing us to make mistakes that cost us health and wealth. We need help.

But we shouldn't be forced into better decisions, the authors argue. Rather, we should be "nudged" toward a selection of choices that are better than doing nothing, which tends to be the default.

For instance, people should be placed automatically into retirement plans at work but given the choice to opt out. In too many cases, the default is to opt in.

Likewise, our savings contributions should be automatic -- at a low level, with an opt-out choice -- in order to make sure people invest at least something. Those investments should be into a broad, easy-to-follow, low-cost portfolio, rather than piling up as uninvested cash.

Once a saver sees those investments growing, the impulse becomes to save more and to stay invested. They're already on the road toward a better retirement.

John Bogle, founder of the Vanguard Group, has long made the same arguments based his decades of experience working with investors.

Posted by at October 22, 2017 1:01 PM

  

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