Journal of Family and Economic Issues

, Volume 28, Issue 2, pp 321–335

Overcoming Inertia: Do Automated Saving and Investing Strategies Work?

Original Paper

DOI: 10.1007/s10834-007-9063-x

Cite this article as:
O’Neill, B. J Fam Econ Iss (2007) 28: 321. doi:10.1007/s10834-007-9063-x


Many workers do not take advantage of savings opportunities provided to them at their workplace, nor do they always make wise investment decisions regarding employer plans. Various automated strategies have been implemented by employers with the objective of increasing retirement plan participation and, hence, the financial security of workers. Automatic strategies work by proactively arranging some type of action (e.g., plan enrollment) to occur unless people specifically opt out. This article examines and synthesizes previous empirical research about five automatic savings and investing strategies: (a) automatic retirement savings plan enrollment, (b) automatic contribution increases, (c) automatic portfolio rebalancing, (d) automatic rollovers, and (e) automatic investment plans. Advantages and disadvantages of each strategy are discussed, along with implications for financial educators.


Automatic investingAutomatic retirement plan enrollment401(k) plans

Copyright information

© Springer Science+Business Media, LLC 2007

Authors and Affiliations

  1. 1.Specialist in Financial Resource Management, Rutgers Cooperative ExtensionNew BrunswickUSA