I had the chance to listen to Dan Heath recently. He’s the coauthor, with his brother Chip, of Switch, a new book about making changes. I’d read their last book, Made to Stick, and thought their conclusions were valuable, so I was looking forward to Dan’s talk.
401(k) accounts are typically among the largest assets held by middle- and upper-middle-income households in the United States. So naturally they draw a lot of attention—in the marketplace, in the media, and in Washington. The government, for example, is proposing new rules on reporting fees and promoting impartiality in investment advice.
Given all the back and forth in Washington these days, with policy meetings and dramatic proposals to revolutionize retirement, I’ve got retirement-income solutions on the brain. So here’s a modest proposal for providing “Retirement Income Security for All.”
I’ve been watching the U.S. consumer savings rate climb. It’s been heartening to witness the ascent past 5% on its way to perhaps 7%. Any way you look at it, this is a welcome—if not critical—change in our financial/economic behavior.
I started digging into how this rate is computed and asked a few of our resident economists for some explanation. As a result, I don’t feel quite as good about the savings rate as I did, but I understand the basis for it much better.
Several years ago at a speech in New York, I warned that “a future President Clinton or McCain would face a daunting budget challenge from population aging.” My political forecast was off, but my economic and demographic forecast is unchanged.
