• Talking personal finance with Helaine Olen: Part 4

    Helaine and I continue our conversation on personal finance. Our topics include what your financial advisor has in common with Dionne Warwick.

    Helaine then expresses skepticism about “nudges,” and more interestingly, about the inherent limits of behavioral economics. We discuss the pitfalls of a professional consensus in which retirement experts come to regard misguided individual behavior and impatience as the fundamental challenge in retirement saving policy. I myself am ambivalent about this issue. Our culture of consumption and pervasive innumeracy are genuinely serious problems. Yet one can narrowly focus on these issues and thus neglect the importance of stagnant wages and other macroeconomic problems.

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    • As long as there is an opt out in employer-sponsored plans, given the massive amount of disclosure involved when adopting such automatic features, I have few concerns.

      Done right, automatic features should be applied perennially so that a decision made in 2013 to decline participation at the time of hire, does not remain unchallenged for one, two, three or four decades.