Charlie Herman, host of WNYC’s Money Talking – a weekly analysis of what’s happening in the business world and why it matters in your life – moderates a discussion on retirement savings with The New York Times columnist Joe Nocera and TIME managing editor and CNN economic analyst Rana Foroohar.
The retirement system has often fallen short of providing the financial support that people need, causing many Americans to reassess their retirement plans. California exemplifies coming changes in retirement planning through its California Secure Choice program, Foroohar told Herman. The program would provide a savings vehicle for every Californian to jump start their retirement planning.
Other countries like the United Kingdom have tried tackling the retirement crisis by getting people to start saving earlier. Nocera noted that research has shown a social benefit to starting earlier when building saving habits, and that more successful planning may lie in the psychological field.
“One of the things behavioral economists have argued for a long time is that part of the problem with 401K is that they’re opt-in,” Nocera said. “If you happen to decide to go into one and if you don’t you don’t, as opposed to opting out. You’re automatically in a plan and you have to consciously make the decision to opt out of it.”
Nocera also said that for many Americans, long-term planning and skillful investing are difficult. Retirement programs like California’s remain controversial on a national level, but with states like Illinois and Massachusetts studying these plans, Foroohar sees a slow and steady movement toward more enforced savings.
“We need to be saved from ourselves when it comes to retirement sometimes,” she said.
Read the full transcript here.