I have been thinking about two issues – how to reduce leakages from 401(k) plans and whether low-wage workers who are auto-enrolled into IRAs will stay put or opt out. The link between these issues is the employee’s need to access funds before retirement. Some suggest that people establish a buffer – or short-term – savings account that they could access when their roof springs a leak. But it doesn’t seem realistic to ask people who can barely afford to cut back on spending to fund both a short-term buffer account and a retirement-savings account.
Read the full article at MarketWatch.