Should the Government Force People to Save for Retirement?

The United Kingdom is phasing in a new law that requires business owners to automatically enroll their employees in a retirement plan. Do you think there should be something similar in the United States?

In this video we discuss the pros and cons of auto-enrollment, the longevity of social security, and the psychological barriers of investing in the stock market.

Further Reading:
Why Saving Money is So Hard –
Small Business Stats –
NPR Article –
Bankrate Survey –

4 thoughts on “Should the Government Force People to Save for Retirement?

  1. Phil Hinkle

    First and foremost, the govt should not ever be in the business of making us save money or making us get health insurance (and fine us if we don’t). So No. Now I like the idea of automatically enrolling folks in a saving plan though employers, not the govt, and allowing them to opt out if they chose. However as a small business with only a few employees, I’m afraid this would be a huge cost for me that I’d have to make up in either lower salary or higher costs to my customers.

    1. Mike And Lauren Post author

      I think we share the same sentiment. I’m curious about the costs to small business owners in the UK as well. It seems like they made it a pretty easy online system to enroll.

  2. LM

    I agree with Phil in that the government shouldn’t mandate retirement. The good news is that if you auto-enroll, as you saw in the UK, very few people will de-enroll so that gives us good coverage. For small business owners like Phil, there is also the new account called myRA which could make it essentially free to enroll and the most it will cost you is the time to fill out a direct-deposit form. The downside is that the account is invested in Treasury bonds which don’t have the highest return, but once you hit $15,000 or 30 years in that particular account you have to transfer it to a mutual fund company (or brokerage) like Vanguard. That could be the perfect bridge to get people started with minimal impact to small businesses.

    1. Mike And Lauren Post author

      I haven’t done enough research on the myRA to have an opinion, but it does seem like a good stepping stone for new investors.

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