Some might call the Wall Street Journal's article on automatic enrollment "sensationalized pessimism," but if there's no such thing as bad publicity, then I'd say that putting auto-enrollment in the spotlight is a good thing.
The WSJ paints a picture of how auto-enrollment is poisoning retirement savings because people are locking in at the default rate of 3 percent, rather than the more common elective rates of 5 to 10 percent.
Even if you took that conclusion in the negative (which I don't), the question is, how many people are actually affected?
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Of the more than 600,000 401(k) plans that file annually, only 18,000 or so actually listed themselves as participating in some kind of automatic enrollment program. That's only 3 percent.
When you only look at the smaller Short Form filers, that number drops to 1.5 percent.
No one should ever be forced to pay for something they don't want or need, but encouraging someone to make a smart choice like enrolling them automatically in a retirement plan, someone who otherwise might go for the more myopic play, helps us all in the long run.
It's time to get above the 3 percent mark.
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