Issue 532 Auto Enrolment for Retirement February 20, 2015

I was reading an article in the economist about retirement (though I myself am very far away from retiring).  People are not saving money and that is becoming a detriment to people when they want to retire.  So the Economist has proposed auto retirement as a solution.  Is this the right idea?  Let us discuss.

Why auto enrolment works:  The reason the economist supports this idea is because it boosts participation into the retirement programs by 40% (this is their numbers).  Well, that is a very big number.  Also, the economists pointed out that things like Social Security and other social welfare programs cannot keep up the pace if so many people were to retire without a plan.  So baby boomers and the like in America will strain the country's Social Security system and its welfare programs that will be used to supplement that income when money from Social Security is not enough.  So the people at the Economist see more people saving for retirement as the only solution to getting through a possible financial crisis.

Is it worth it?:  I know that retirement and financial independence from a government body is worth it.  I mean, 40% more people saving means less financial resources government will have to use to help people, and less people having to work longer or struggle with money later on in life.  But forcing people is something a government body should not do, and yet they do so with Social Security.  Then having businesses where you are employed do the same thing becomes unnerving.  I mean, it is saying you are too dumb to save money on your own.  Too stupid to plan ahead.  Blah blah blah.  Retirement is worth it in my opinion, but I opted in to save, but what about those who need a push?  

Conclusion:  What I have found is that learning what to do to invest in a 401K, into stocks, and other savings tools was very difficult to do.  In fact, I still do not really understand it all myself.  I learned what these things do from my parents, who while only about a decade away from retirement do not understand how it works really either.  They just know that they have accounts and stocks with other forms of savings which they hope will carry them through for as long as possible.  So auto enrolment is not my definition of a solution.  It is education.  Dumbing the learning down so that a dope like me can understand how it all works and figure out how much I would need to save to have a specific amount of money to last ten to 30 years when I eventually retire.  I want to be able to invest in the stock market, form a 401K or other financial savings tool without having to go to a broker.  I think that the reason people do not invest into saving for retirement is because that they do not understand how (in addition to not understanding why).  Therefore, give me a service or an education program that gives me what I asked, a simple and easy method to know and understand when and where to save so I can retire and actually take it easy.  I don't want to be forced to retire when it's inconvenient, but when it makes sense and is beneficial to me.  Education is the key that is my solution.