Nudge Chapter 9 Flashcards
What is defined contribution?
Stipulate only how much employers and their employees contribute into tax sheltered account in the employees name
What are some examples of defined contribution plans?
401k
How do defined contribution plans work?
Benefits are used and depend on the decisions they make about how much to save and invest
What is the nudge design for defined contribution plans?
People are allowed to change jobs if they want and also allows them to adjust their savings and retirement
What is enrollment?
Matching people into plans that are most effective and convenient. Some methods of this are automatic enrollment where it is the default and nothing else is required.
What is true about enrollment?
If it is automatic more people are willing to accept or be in it.
What are saving rates?
The money that is left over after spending and paying taxes.
What is Save More Tommorrow?
A plan where people commit themselves to a series of contribution increases timed to coincide with pay raises. Essentially a piece of future salary increases toward retirement savings.
What is are target-date funds?
Mix of stocks and bonds where participants choose a date at which they plan to retire and the fund adjust the portfolio over time
What are default options?
The chosen option that requires no extra behavior or alteration
