۩ ╠ Automatic saving and planning for the collection of wealth!! ╣ ۩
Robert J.. Schiller
Robert J.. Schiller
People are fascinated by wealth. They enjoy watching the wealthy, savoring the thought of their fine homes, luxurious vacations, fancy cars, and gourmet dining. But if you infer from this that people spend a lot of time planning for the collection of their own wealth in their lifetime, you would be wrong.
Most people do not seem to think much as they should Adkhrōh of their income, or the difference in the size of their wealth in their later years if they took the initiative today to just adjusted their saving rate. Most people just pay off their mortgage, and the payment of mandatory contributions to their pension for the state or private pension (if they have one), and keep some money for emergency short-term. And that's it.
In a famous article of economist Frank Ramsey, published in 1928, said that people have "a weakness in their imagination" about how that might affect their future actions today. He adds that if people thought about it properly, they might well conclude that they should save half their income. And as such has accumulated wealth might make them very happy in their later years. However, they often do not even think about that possibility.
, A contemporary economist Richard Thaler may occur in 1980 what he called "the endowment effect." According to this effect people act as if they were mostly happy with their despite admire other things they do not own, and thus fail to think of any real change.
Apathy for people saving for the future is one of the biggest challenges faced by governments. We have realized some of the leaders who thought that the problem is real and can not be ignored. However, it is difficult to fit solutions into either a traditional liberal or traditional conservative political philosophy.
Since 1955, Singapore has taken a direct approach: I put saving plan and a national mandatory. The fact that this plan generates savings rates are extremely high. The contribution rate for this fund is now 34.5 per cent for people with higher incomes.
The United States has no compulsory saving plan, the personal saving rate has a very low but in fact, negative. But the government is considering a mandatory saving plan. Instead, it is taking steps to overcome the individual inertia that inhibits saving.
For example, the Pension Protection Act of 2006 encourages employers to enroll employees automatically in a personal saving plan for old age. This differs fundamentally from Singapore's scheme, since employers are not required to do the same thing. Despite the discount from the salaries of employees without their consent, they can withdraw from this plan at their own request. The plan adopted by the modern New Zealand and the Pensions Act 2007 in the United Kingdom on the principle of automatic enrollment for employees to give them the right to withdraw if they so choose.
See Bridget Madrian of Harvard University that automatic enrollment in savings plans is of great importance, even if the employee is free to withdraw from this plan. If employers tell their employees to join the new pension saving plan is available, and even promise to employers' contributions, a share comparable to that contributed by each employee still will not quite a few of the staff participate.
But if employers automatically enroll their employees in the plan, telling them that they can drop out at any time simply by notifying the employer, most of the staff will accept the plan. Moreover, it appears that workers accept the contribution rate chosen by the employer of any kind.
A study of Madrian and her colleagues suggests that the new pension plans will improve saving in the countries that adopt such plans. Perhaps these countries could do better by adopting a compulsory saving plan, but it is not likely to do so. If, despite that these countries will not succeed in raising the savings rate to a level that Singapore has brought him, but they can make tangible progress.
The best reason not to make savings plans compulsory is that different people face different circumstances that only they know about. Some people love their work, and never want to retire; and this saving is less important to them. Some people want to spend the bulk of the money now on education, or psychotherapy, or whatever else is important to them, and this makes them want to postpone saving until later.
The fundamental problem is that some people may postpone saving for sensible reasons, and will resume saving later, but the others fail to save for no good reason, and not likely to make up for it later.
Government saving plan that is based on automatic, though not compulsory, is capable of dealing with this problem, at least in part. Automatic enrollment creates a saving plan that is sensible for the average person. This means that pay no attention to such matters will remain in the plan, but those who want to withdraw it will not cost them more than a letter to the employer.
These saving plans show that there are methods other than outright compulsion to overcome human inertia. We hope that is the adoption of such plans on a large scale in the future in terms that we can devise a variety of programs that serve both inertial and active individuals alike.
In a famous article of economist Frank Ramsey, published in 1928, said that people have "a weakness in their imagination" about how that might affect their future actions today. He adds that if people thought about it properly, they might well conclude that they should save half their income. And as such has accumulated wealth might make them very happy in their later years. However, they often do not even think about that possibility.
, A contemporary economist Richard Thaler may occur in 1980 what he called "the endowment effect." According to this effect people act as if they were mostly happy with their despite admire other things they do not own, and thus fail to think of any real change.
Apathy for people saving for the future is one of the biggest challenges faced by governments. We have realized some of the leaders who thought that the problem is real and can not be ignored. However, it is difficult to fit solutions into either a traditional liberal or traditional conservative political philosophy.
Since 1955, Singapore has taken a direct approach: I put saving plan and a national mandatory. The fact that this plan generates savings rates are extremely high. The contribution rate for this fund is now 34.5 per cent for people with higher incomes.
The United States has no compulsory saving plan, the personal saving rate has a very low but in fact, negative. But the government is considering a mandatory saving plan. Instead, it is taking steps to overcome the individual inertia that inhibits saving.
For example, the Pension Protection Act of 2006 encourages employers to enroll employees automatically in a personal saving plan for old age. This differs fundamentally from Singapore's scheme, since employers are not required to do the same thing. Despite the discount from the salaries of employees without their consent, they can withdraw from this plan at their own request. The plan adopted by the modern New Zealand and the Pensions Act 2007 in the United Kingdom on the principle of automatic enrollment for employees to give them the right to withdraw if they so choose.
See Bridget Madrian of Harvard University that automatic enrollment in savings plans is of great importance, even if the employee is free to withdraw from this plan. If employers tell their employees to join the new pension saving plan is available, and even promise to employers' contributions, a share comparable to that contributed by each employee still will not quite a few of the staff participate.
But if employers automatically enroll their employees in the plan, telling them that they can drop out at any time simply by notifying the employer, most of the staff will accept the plan. Moreover, it appears that workers accept the contribution rate chosen by the employer of any kind.
A study of Madrian and her colleagues suggests that the new pension plans will improve saving in the countries that adopt such plans. Perhaps these countries could do better by adopting a compulsory saving plan, but it is not likely to do so. If, despite that these countries will not succeed in raising the savings rate to a level that Singapore has brought him, but they can make tangible progress.
The best reason not to make savings plans compulsory is that different people face different circumstances that only they know about. Some people love their work, and never want to retire; and this saving is less important to them. Some people want to spend the bulk of the money now on education, or psychotherapy, or whatever else is important to them, and this makes them want to postpone saving until later.
The fundamental problem is that some people may postpone saving for sensible reasons, and will resume saving later, but the others fail to save for no good reason, and not likely to make up for it later.
Government saving plan that is based on automatic, though not compulsory, is capable of dealing with this problem, at least in part. Automatic enrollment creates a saving plan that is sensible for the average person. This means that pay no attention to such matters will remain in the plan, but those who want to withdraw it will not cost them more than a letter to the employer.
These saving plans show that there are methods other than outright compulsion to overcome human inertia. We hope that is the adoption of such plans on a large scale in the future in terms that we can devise a variety of programs that serve both inertial and active individuals alike.
