Overheard at Work 2

[Hunny156]

Cube mate just recently bought a brand new house, and has been actively spending money to furnish it, mostly using a designer to assist with picking stuff out.  ALL of it is very expensive.

Her son had picked out a storage bed on WayFair that has been OOS for the past 6 weeks, and Mom is tired of waiting for it to come back in stock.  Son is not complaining.

So today she picked a queen headboard/frame for him from Living Spaces.  It's on sale for $450.  She asked me if I think this would fit in the back of the Cayenne.  I said yes, b/c it is an SUV, and this is put together furniture, should be no problem.  Our other cube mate pipes up and says no, laughingly, b/c he doesn't want her to damage the Cayenne.  She agrees w/me that it's not worth the $100 delivery fee, so she's going to pick it up.

Next, she's getting frustrated b/c the coupon code she has won't work.  I come over to take a look, and she's using the wrong code.  I help her put in the correct code, and this time, it works.  Great.  Before she hits submit, I suggest she check and make sure that the code was actually applied to the order.  She sheepishly scrolls up and says, well since I had the coupon code, I decided to pay for delivery.  The code was for $25.  Grand total of the order was roughly $650.  I just smiled to myself and ran over here to post while she went to the cafe to buy her lunch, like she does every day.

[Kitsune]

At work: every single person making 50k+ brings in lunch every day.

Every single person making under 50K eats out minimum 3 time spent per week, usually more.

... how does that work, exactly?

[The_Big_H]

At work: every single person making 50k+ brings in lunch every day.

Every single person making under 50K eats out minimum 3 time spent per week, usually more.

... how does that work, exactly?

Around my office, the dividing line of going out versus bringing lunch is typically Age >~32ish.  Which is funny because thats about how I did it, ate lunch all the time with the "crew" in 20s, now 35 and havent eaten lunch out more than once a month.

[Linea_Norway]

At work: every single person making 50k+ brings in lunch every day.

Every single person making under 50K eats out minimum 3 time spent per week, usually more.

... how does that work, exactly?

Around my office, the dividing line of going out versus bringing lunch is typically Age >~32ish.  Which is funny because thats about how I did it, ate lunch all the time with the "crew" in 20s, now 35 and havent eaten lunch out more than once a month.

Either the 50K+ people are Mustachians and have seen the light. Or they are old enough to have started to worry about their cholesterol and have figured out that a lunch from home is healthier than eating out.

[Dicey]

With the right brand shoes can really last. I bought "cheap" shoes for years and years before finding shoes that suddenly lasted 3-4 times longer than the cheap shoes and felt good enough to wear everyday.

Imagine that - feels good and lasts too.

An even better hack is to buy at least two pair of this perfect shoe. Wear them on alternate days and always keep them on shoe trees when not in use. You will be amazed at how much longer they last.

[Kitsune]

At work: every single person making 50k+ brings in lunch every day.

Every single person making under 50K eats out minimum 3 time spent per week, usually more.

... how does that work, exactly?

Around my office, the dividing line of going out versus bringing lunch is typically Age >~32ish.  Which is funny because thats about how I did it, ate lunch all the time with the "crew" in 20s, now 35 and havent eaten lunch out more than once a month.

Either the 50K+ people are Mustachians and have seen the light. Or they are old enough to have started to worry about their cholesterol and have figured out that a lunch from home is healthier than eating out.

You're totally right. The age divide is not absolute (there are a few people in their 50s who eat out) but it's definitely a link.

... mind, people don't 'eat out', it's the wrong term. They order in, and then eat their take-out lunch at the lunch table with everyone who brought their lunches.

[Apple_Tango]

Are the people eating out single? Young people are usually single and above age 30 more people are usually married. Married people/people with families tend to not eat out as much because they have more responsibilities and bills, and because they cooked dinner the night before, or their wife/husband packed them a lunch.

[Kitsune]

Are the people eating out single? Young people are usually single and above age 30 more people are usually married. Married people/people with families tend to not eat out as much because they have more responsibilities and bills, and because they cooked dinner the night before, or their wife/husband packed them a lunch.

No, that's 50/50, not related to age.

[talltexan]

At work: every single person making 50k+ brings in lunch every day.

Every single person making under 50K eats out minimum 3 time spent per week, usually more.

... how does that work, exactly?

That's an awfully specific knowledge of your co-workers' salaries there?

[Kitsune]

At work: every single person making 50k+ brings in lunch every day.

Every single person making under 50K eats out minimum 3 time spent per week, usually more.

... how does that work, exactly?

That's an awfully specific knowledge of your co-workers' salaries there?

I process payroll.

... and I'd never give out detailed information, but I still know it.

[talltexan]

I also have an update: I've been overhearing a series of conversations between my mid 30's female co-worker, and a mid 20's female she has been quasi-mentoring.

The "mentee" has announced that she's moving out of her parents' house...into a $340,000 condo she will be renting from her parents. Over the course of several discussions, she has laid bare many insecurities regarding the level to which she is still dependent on them.

But the "mentor"--while giving tough love to the mentee--waits until she leaves and then (to me) will express genuine envy that parents are making things so easy. AFAICS, both of them have good jobs, but the real kicker is: "mentor" has put herself deeply in debt through buying cars and houses wayyy out of line with her income and constant travel far away places. And there's the matter of student loans still dogging her, too.

[ysette9]

I feel sorry for both of them

[Kitsune]

I feel sorry for both of them

Seriously.

And because most people don't TALK about money in real ways (using actual numbers!), it's super hard to be young and know what's normal/reasonable/sensible/expected, if you see someone in your profession spending like that...

The singular most helpful thing anyone ever did for me: I mentioned to a friend who was 7 years older than me that I'd like to be where she was in 7 years but had no idea how to get there. She basically took me to her desk and opened up the details of her bank account, family budget, average spending, and investment accounts. Not something anyone ever does (god knows my parents never even had a budget), but I have no idea where I'd be right now without that half-hour conversation. Set expectations that were actually based on reality (that I could then modify to my personal priorities, but... reality-based expectations you can work with.)

[kelvin]

At work: every single person making 50k+ brings in lunch every day.

Every single person making under 50K eats out minimum 3 time spent per week, usually more.

... how does that work, exactly?

I eat out waaaay less now that I can afford to live on my own. If my roommate was in the shower I could go to the gym, but if my roommate was in the kitchen I had to go eat out.

I didn't move out on my own until I was making $59k/year.  Here's why: https://obj.ca/article/prices-spike-supply-tightens-across-segments-ottawas-rental-market

[SwordGuy]

I eat out waaaay less now that I can afford to live on my own. If my roommate was in the shower I could go to the gym, but if my roommate was in the kitchen I had to go eat out.

@kelvin ,

"Had to"?????

"Had to"????

Couldn't wait a bit?   Couldn't work around them?   Couldn't work out a schedule that worked for both of you?

Would have literally starved to death if you didn't rush to the restaurant right then and there?

[M5]

A couple days ago DW's coworker asked DW to accompany her to get a tattoo after work, to which she declined. When DW went to work the next day she found out the tattoo was of coworker's new BF's name, of which she's been dating about a month. This coworker has a history of remarkably bad life decisions, so while I'm not surprised, it still makes my head spin.

[Warlord1986]

A couple days ago DW's coworker asked DW to accompany her to get a tattoo after work, to which she declined. When DW went to work the next day she found out the tattoo was of coworker's new BF's name, of which she's been dating about a month. This coworker has a history of remarkably bad life decisions, so while I'm not surprised, it still makes my head spin.

Keep an eye on this one. It shows promise for more stories.

[Kitsune]

A couple days ago DW's coworker asked DW to accompany her to get a tattoo after work, to which she declined. When DW went to work the next day she found out the tattoo was of coworker's new BF's name, of which she's been dating about a month. This coworker has a history of remarkably bad life decisions, so while I'm not surprised, it still makes my head spin.

Keep an eye on this one. It shows promise for more stories.

OMG.

Well, there's a reason someone will spend 50$ on a tattoo and 500$ on a cover-up of said tattoo, I suppose.

[talltexan]

Never bought a tat, but I think $50 is probably low.

[Kitsune]

Never bought a tat, but I think $50 is probably low.

Around here, a simple name with no ornamentation would be about that (based on 2 colleagues). A larger piece (say, 3-ish inches wide) would be in the low/mid-hundreds range, and a cover-up would be more because the work involved to design it is more complex. When I asked an artist I like about a half-sleeve, that would have come out to the low-thousands kind of range, and I quickly nope-ed right out of that.

Of course, that depends strongly on location and artist, but... yeah.

[M5]

Never bought a tat, but I think $50 is probably low.

Yes, definitely low. Some backstory - she's s single mom who's baby-daddy left her shortly after the child was born. Despite this, she co-signed a loan and credit card for him to start an over the road trucking company and buy his own semi. I believe he's maxed out credit cards in her name to the tune of somewhere around $80k. Oh, and I think the semi title is in her name. Though instead of taking him to court and at LEAST getting the semi in her possession and selling it to recover some expenses, she just keeps trudging along hoping everything will work out.

So @Warlord1986 yes, this shows great promise of future stories.

[Kitsune]

Never bought a tat, but I think $50 is probably low.

Yes, definitely low. Some backstory - she's s single mom who's baby-daddy left her shortly after the child was born. Despite this, she co-signed a loan and credit card for him to start an over the road trucking company and buy his own semi. I believe he's maxed out credit cards in her name to the tune of somewhere around $80k. Oh, and I think the semi title is in her name. Though instead of taking him to court and at LEAST getting the semi in her possession and selling it to recover some expenses, she just keeps trudging along hoping everything will work out.

So @Warlord1986 yes, this shows great promise of future stories.

Oh, man, that poor kid. Growing up in that kind of situation and being taught those kind of life skills sets you up for something ROUGH.

[Cellista]

At work: every single person making 50k+ brings in lunch every day.

Every single person making under 50K eats out minimum 3 time spent per week, usually more.

... how does that work, exactly?

I went through 3 phases of eating out/bringing in:
Early years: made little money, brought lunch to save.
Middle years: had more money, bought lunch out as a break from stressful job
Late years: looking forward to retirement, bringing lunch to save $

[Just Joe]

With the right brand shoes can really last. I bought "cheap" shoes for years and years before finding shoes that suddenly lasted 3-4 times longer than the cheap shoes and felt good enough to wear everyday.

Imagine that - feels good and lasts too.

An even better hack is to buy at least two pair of this perfect shoe. Wear them on alternate days and always keep them on shoe trees when not in use. You will be amazed at how much longer they last.

Thank you!

[ixtap]

With the right brand shoes can really last. I bought "cheap" shoes for years and years before finding shoes that suddenly lasted 3-4 times longer than the cheap shoes and felt good enough to wear everyday.

Imagine that - feels good and lasts too.

An even better hack is to buy at least two pair of this perfect shoe. Wear them on alternate days and always keep them on shoe trees when not in use. You will be amazed at how much longer they last.

Thank you!

Do they last more than twice as long? I am on pair 2 of 4 of my last stock up, but I just go through one pair at a time, unless I really want one of the other colors for a specific occasion.

[BiCu]

The owners of the company forgave the $60K “loan” and did not press charges, but this CW destroyed his professional reputation and ability to earn a living which he desperately needs (based on his debt load).

...Did the "loan forgiveness" result in an increased tax liability for this CW...?

[Dicey]

With the right brand shoes can really last. I bought "cheap" shoes for years and years before finding shoes that suddenly lasted 3-4 times longer than the cheap shoes and felt good enough to wear everyday.

Imagine that - feels good and lasts too.

An even better hack is to buy at least two pair of this perfect shoe. Wear them on alternate days and always keep them on shoe trees when not in use. You will be amazed at how much longer they last.

Thank you!

Do they last more than twice as long? I am on pair 2 of 4 of my last stock up, but I just go through one pair at a time, unless I really want one of the other colors for a specific occasion.

It's better for your feet, which is priority #1. Generally, allowing your shoes to dry and air out completely between wearing adds to their longevity significantly. Keeping them on shoe trees keeps them from stretching out of shape. It all adds up.

[dragoncar]

With the right brand shoes can really last. I bought "cheap" shoes for years and years before finding shoes that suddenly lasted 3-4 times longer than the cheap shoes and felt good enough to wear everyday.

Imagine that - feels good and lasts too.

An even better hack is to buy at least two pair of this perfect shoe. Wear them on alternate days and always keep them on shoe trees when not in use. You will be amazed at how much longer they last.

Thank you!

Do they last more than twice as long? I am on pair 2 of 4 of my last stock up, but I just go through one pair at a time, unless I really want one of the other colors for a specific occasion.

It's better for your feet, which is priority #1. Generally, allowing your shoes to dry and air out completely between wearing adds to their longevity significantly. Keeping them on shoe trees keeps them from stretching out of shape. It all adds up.

While I believe there must be some benefit to this practice, I’m dubious that’s its significant.  My shoes definitely dry out overnight due to climate.  But wouldn’t the constant change in humidity actually be bad for the materials?  Wouldn’t a stable humidity be preferable?  In which case, you should leave your shoes on all the time!

Honestly it’s advice like this that has led to me having way too many pairs of dress shoes in retirement.  Totally unmustachian.

[nouveauRiche]

Yes, definitely low. Some backstory - she's s single mom who's baby-daddy left her shortly after the child was born. Despite this, she co-signed a loan and credit card for him to start an over the road trucking company and buy his own semi. I believe he's maxed out credit cards in her name to the tune of somewhere around $80k. Oh, and I think the semi title is in her name. Though instead of taking him to court and at LEAST getting the semi in her possession and selling it to recover some expenses, she just keeps trudging along hoping everything will work out.

So @Warlord1986 yes, this shows great promise of future stories.

This just makes me sad.

[Dicey]

With the right brand shoes can really last. I bought "cheap" shoes for years and years before finding shoes that suddenly lasted 3-4 times longer than the cheap shoes and felt good enough to wear everyday.

Imagine that - feels good and lasts too.

An even better hack is to buy at least two pair of this perfect shoe. Wear them on alternate days and always keep them on shoe trees when not in use. You will be amazed at how much longer they last.

Thank you!

Do they last more than twice as long? I am on pair 2 of 4 of my last stock up, but I just go through one pair at a time, unless I really want one of the other colors for a specific occasion.

It's better for your feet, which is priority #1. Generally, allowing your shoes to dry and air out completely between wearing adds to their longevity significantly. Keeping them on shoe trees keeps them from stretching out of shape. It all adds up.

While I believe there must be some benefit to this practice, I’m dubious that’s its significant.  My shoes definitely dry out overnight due to climate.  But wouldn’t the constant change in humidity actually be bad for the materials?  Wouldn’t a stable humidity be preferable?  In which case, you should leave your shoes on all the time!

Honestly it’s advice like this that has led to me having way too many pairs of dress shoes in retirement.  Totally unmustachian.

My experience comes from fourteen years of working retail. It's a lot easier on your body if you don't wear the same shoes every day. Also, our temperate NorCal climate is much more forgiving than other parts of the world, drying out shoes is not so easy elsewhere. A thorough drying out also reduces/eliminates the stink factor for zero cost, which adds to the win.

For you specifically, @dragoncar, you're a rich dude who's already achieved FI, so it's a moot point. You can afford all.the.shoes. Even better, you can choose to wear none. Those work shoes you own can be polished, reheeled and even resoled if necessary. They're never going to go out of style.  Women's shoe fashions are much more mercurial. Taking good care of the ones you have means you may never have to buy another pair of dress shoes in your life. #Winning.
.

[Cassie]

I own 5 pairs of shoes. One dressy and the rest casual.

[slugline]

At a recent employee meeting, the executive team was asked whether our 401(k) could be improved by offering matching funds. The answer was no, citing low plan participation. I feel like that's a little bit of a chicken-or-egg type of situation, because I have to imagine that enthusiasm would be higher with matching funds as incentive.   What's sad is that our plan isn't terrible -- all administration fees are being paid at the company level and our investment choices are decent, including a handful of institutional index funds with deliciously-low expense ratios.  Lack of matching is all that separates this plan from being brag-worthy.

[Enigma]

At a recent employee meeting, the executive team was asked whether our 401(k) could be improved by offering matching funds. The answer was no, citing low plan participation. I feel like that's a little bit of a chicken-or-egg type of situation, because I have to imagine that enthusiasm would be higher with matching funds as incentive.   What's sad is that our plan isn't terrible -- all administration fees are being paid at the company level and our investment choices are decent, including a handful of institutional index funds with deliciously-low expense ratios.  Lack of matching is all that separates this plan from being brag-worthy.

I feel like that wasn't even an answer to the original question.  It was a deflection.  You answer no to the original question deflecting with a fact.  Ultimately the executive team had no goal to improve the 401k plan with a loss.  Even with a low participation the 401k could be improved by offering matching funds.  Thankfully I wasnt at the employee meeting.  I probably would have flipped my lid going off on the exec team and lost my job.

[artemidorus]

At a recent employee meeting, the executive team was asked whether our 401(k) could be improved by offering matching funds. The answer was no, citing low plan participation. I feel like that's a little bit of a chicken-or-egg type of situation, because I have to imagine that enthusiasm would be higher with matching funds as incentive.   What's sad is that our plan isn't terrible -- all administration fees are being paid at the company level and our investment choices are decent, including a handful of institutional index funds with deliciously-low expense ratios.  Lack of matching is all that separates this plan from being brag-worthy.

I feel like that wasn't even an answer to the original question.  It was a deflection.  You answer no to the original question deflecting with a fact.  Ultimately the executive team had no goal to improve the 401k plan with a loss.  Even with a low participation the 401k could be improved by offering matching funds.  Thankfully I wasnt at the employee meeting.  I probably would have flipped my lid going off on the exec team and lost my job.

Agreed, this is a lie and the reason makes no sense. If the participation is low, that means the cost of adding a match is low, assuming many won't take advantage. It's not even a good excuse. You could even argue that participation would barely budge if they introduced it, so the cost won't be so bad.

My job only has a 1% match on the 403(b), but does provide a meager pension with no contribution from the employees. This is confusing for many people, who don't understand what a 403(b) is and don't want to find out, so I've found that many just are happy to have the pension and avoid adding anything to the 403(b) saying, "Well it's only 1%."

A co-worker about 15 years my senior, and who has been here over 20 years, told me he'd only ever contributed the minimum 1% a year since they introduced the match 10 years ago, and prior to that contributed nothing. Knowing his rough salary, he's MAYBE contributed $7K total in 20 years.

Which means in one year, I've contributed more than double what he has in two decades.

[Cassie]

The state I worked for didn’t have a match and I always contribute. I was shocked at the number of people that were fine with the pension alone. Crazy!

[SwordGuy]

At a recent employee meeting, the executive team was asked whether our 401(k) could be improved by offering matching funds. The answer was no, citing low plan participation. I feel like that's a little bit of a chicken-or-egg type of situation, because I have to imagine that enthusiasm would be higher with matching funds as incentive.   What's sad is that our plan isn't terrible -- all administration fees are being paid at the company level and our investment choices are decent, including a handful of institutional index funds with deliciously-low expense ratios.  Lack of matching is all that separates this plan from being brag-worthy.

I feel like that wasn't even an answer to the original question.  It was a deflection.  You answer no to the original question deflecting with a fact.  Ultimately the executive team had no goal to improve the 401k plan with a loss.  Even with a low participation the 401k could be improved by offering matching funds.  Thankfully I wasnt at the employee meeting.  I probably would have flipped my lid going off on the exec team and lost my job.

Agreed, this is a lie and the reason makes no sense. If the participation is low, that means the cost of adding a match is low, assuming many won't take advantage. It's not even a good excuse. You could even argue that participation would barely budge if they introduced it, so the cost won't be so bad.

My job only has a 1% match on the 403(b), but does provide a meager pension with no contribution from the employees. This is confusing for many people, who don't understand what a 403(b) is and don't want to find out, so I've found that many just are happy to have the pension and avoid adding anything to the 403(b) saying, "Well it's only 1%."

A co-worker about 15 years my senior, and who has been here over 20 years, told me he'd only ever contributed the minimum 1% a year since they introduced the match 10 years ago, and prior to that contributed nothing. Knowing his rough salary, he's MAYBE contributed $7K total in 20 years.

Which means in one year, I've contributed more than double what he has in two decades.

I know that there are restrictions on highly paid mgmt. stuffing matching funds into a 401k that their workers aren't participating in.    (Obviously that provision was put in by congressmen who actually gave a damn about regular workers.)
Can't say definitively that's why, but it wouldn't surprise me.

[dragoncar]

Highly compensated employee rules are why I don’t believe participation was even low.  If it was low, they’d want to offer a small match to increase participation

[slugline]

Highly compensated employee rules are why I don’t believe participation was even low.  If it was low, they’d want to offer a small match to increase participation

Conveniently, the Form 5500 filing is public. Unless someone is grossly misreporting the numbers, only about 1 in 10 active employees have any 401(k) account balance at all.

And yes, I didn't find that answer/excuse/deflection satisfactory because it was obvious to me as well that low participation obviously means that just a little match shouldn't be expensive.

[redhead84]

The owners of the company forgave the $60K “loan” and did not press charges, but this CW destroyed his professional reputation and ability to earn a living which he desperately needs (based on his debt load).

...Did the "loan forgiveness" result in an increased tax liability for this CW...?

I have no idea if they reported the loan forgiveness as income or not. They probably should have.

[jeff191]

Matches don't improve participation by that much. My previous job involved benefit design and strategy for a large company. We had ~10 separate 401(k) plans and ~30 matching formulas due to union rules in some plans. Some of the matches were multiples better than others - 100% up to 6% vs. 50% up to 4% as an example.

- Plan participation tends to move with match some but it's not enough to say that increasing the match will increase participation.
- Even going from no match to match doesn't increase participation by much (we acquired some small companies with no match and they then went into our plans all of which matched).
- Income of course has a bigger impact - higher salaried groups contributed more.
- We did education as well and held lots of employee meetings to explain the benefits of the plan, the match, and so on. That helped participation but again only a little.

If a plan is failing discrimination testing or is close, only solution that works almost every time is automatic enrollment. That's the only way to measurably increase plan participation. We had some plans with automatic enrollment specifically because they were failing the test. For other plans, the business units did not want to implement auto-enrollment and we had to try the other options (none of which solved the issue). It's an unfortunate reality that auto-enrollment works because people won't take the initiative to opt-out.

Highly compensated employee rules are why I don’t believe participation was even low.  If it was low, they’d want to offer a small match to increase participation

[sherr]

Matches don't improve participation by that much. My previous job involved benefit design and strategy for a large company. We had ~10 separate 401(k) plans and ~30 matching formulas due to union rules in some plans. Some of the matches were multiples better than others - 100% up to 6% vs. 50% up to 4% as an example.

- Plan participation tends to move with match some but it's not enough to say that increasing the match will increase participation.
- Even going from no match to match doesn't increase participation by much (we acquired some small companies with no match and they then went into our plans all of which matched).
- Income of course has a bigger impact - higher salaried groups contributed more.
- We did education as well and held lots of employee meetings to explain the benefits of the plan, the match, and so on. That helped participation but again only a little.

If a plan is failing discrimination testing or is close, only solution that works almost every time is automatic enrollment. That's the only way to measurably increase plan participation. We had some plans with automatic enrollment specifically because they were failing the test. For other plans, the business units did not want to implement auto-enrollment and we had to try the other options (none of which solved the issue).

That's actually really interesting. I had always assumed that better plans would increase participation, but then again I'm not exactly poor. I guess if you don't have the money you don't have it. But then again most of those people manage to find it when it's opt-out...

It's an unfortunate reality that auto-enrollment works because people won't take the initiative to opt-out.

I don't think that's unfortunate, that sounds like a prime opportunity to be aware of mass psychology and use it to make the world a better place. Let's make 10% salary 401k participation and organ donation opt-out everywhere!

[jeff191]

Yeah, on the surface, we all thought that better plans would increase participation and it will but not much. Our plans were very good by any measure - very low expenses, good funds (Vanguard and BlackRock indexes), good matching on most of them, Roth conversion allowed, after-tax allowed, true-up matching, basically every feature that people might find valuable was there. Company took fiduciary responsibilities pretty seriously so we were constantly benchmarking to make sure our plans were on par. But it didn't make much difference. Making a plan better basically just increased the contributions of people who were already contributing, it didn't do much for those who were not. We saw similar issues with the wellness plans - incentives only worked on people who were already participating.

A lot of it is based on income, our lowest participation plans were those on the manufacturing side where it was hourly and starting pay was ~$15 an hour. It was frustrating though to be on site sometimes trying to get people to understand that they were leaving money on the table and the reason they gave for not participating was they just bought a new car...

Matches don't improve participation by that much. My previous job involved benefit design and strategy for a large company. We had ~10 separate 401(k) plans and ~30 matching formulas due to union rules in some plans. Some of the matches were multiples better than others - 100% up to 6% vs. 50% up to 4% as an example.

- Plan participation tends to move with match some but it's not enough to say that increasing the match will increase participation.
- Even going from no match to match doesn't increase participation by much (we acquired some small companies with no match and they then went into our plans all of which matched).
- Income of course has a bigger impact - higher salaried groups contributed more.
- We did education as well and held lots of employee meetings to explain the benefits of the plan, the match, and so on. That helped participation but again only a little.

If a plan is failing discrimination testing or is close, only solution that works almost every time is automatic enrollment. That's the only way to measurably increase plan participation. We had some plans with automatic enrollment specifically because they were failing the test. For other plans, the business units did not want to implement auto-enrollment and we had to try the other options (none of which solved the issue).

That's actually really interesting. I had always assumed that better plans would increase participation, but then again I'm not exactly poor. I guess if you don't have the money you don't have it. But then again most of those people manage to find it when it's opt-out...

It's an unfortunate reality that auto-enrollment works because people won't take the initiative to opt-out.

I don't think that's unfortunate, that sounds like a prime opportunity to be aware of mass psychology and use it to make the world a better place. Let's make 10% salary 401k participation and organ donation opt-out everywhere!

[LennStar]

I don't think that's unfortunate, that sounds like a prime opportunity to be aware of mass psychology and use it to make the world a better place. Let's make 10% salary 401k participation and organ donation opt-out everywhere!

That is called "nudging", which is generally seen as very bad. Except of course you nudge people towards what you want.

[sherr]

I don't think that's unfortunate, that sounds like a prime opportunity to be aware of mass psychology and use it to make the world a better place. Let's make 10% salary 401k participation and organ donation opt-out everywhere!

That is called "nudging", which is generally seen as very bad. Except of course you nudge people towards what you want.

We're not talking about some sleazy guy trying to pick up girls at a bar. Both of the things I mentioned are widely regarded as good for society at large and the individuals in it. Are 401ks being tax-deductible "nudging" as well?

Also citation needed on it "generally being seen as very bad". I'm sure some people will criticize it and I'm sure there could be some unsavoury applications. But it seems generally desirable to me to be able to influence society for the better while ultimately leaving choice to the individual.

[economista]

I don't think that's unfortunate, that sounds like a prime opportunity to be aware of mass psychology and use it to make the world a better place. Let's make 10% salary 401k participation and organ donation opt-out everywhere!

That is called "nudging", which is generally seen as very bad. Except of course you nudge people towards what you want.

Why is nudging seen as really bad? The British government actually set up a behavioral economics group that was colloquially called “the nudge unit.” Freakonomics talks about it a lot and I think it’s a great thing.

[Kitsune]

I don't think that's unfortunate, that sounds like a prime opportunity to be aware of mass psychology and use it to make the world a better place. Let's make 10% salary 401k participation and organ donation opt-out everywhere!

That is called "nudging", which is generally seen as very bad. Except of course you nudge people towards what you want.

Why is nudging seen as really bad? The British government actually set up a behavioral economics group that was colloquially called “the nudge unit.” Freakonomics talks about it a lot and I think it’s a great thing.

I mean, government, advertising, marketing, and most healthcare practices basically rely on the principle, so... I'd really need a citation on 'seen as very bad'.

[talltexan]

Please lay out the case for why--in a world with advertising, disinformation, and people who suffer from frequent failures of information and will power--nudging could be "bad"?

I see how it could be used for bad or good.

[solon]

I'll pile on. In my experience, nudging is generally seen as very good, especially when used to do things like increase 401k participation.

[talltexan]

I'll just add in that I like to "tax" myself.

For all you libertarians out there who consider taxation to be the same as theft, I'm doing it to my own dang self!

[ysette9]

I don't think that's unfortunate, that sounds like a prime opportunity to be aware of mass psychology and use it to make the world a better place. Let's make 10% salary 401k participation and organ donation opt-out everywhere!

That is called "nudging", which is generally seen as very bad. Except of course you nudge people towards what you want.

Why is nudging seen as really bad? The British government actually set up a behavioral economics group that was colloquially called “the nudge unit.” Freakonomics talks about it a lot and I think it’s a great thing.

I mean, government, advertising, marketing, and most healthcare practices basically rely on the principle, so... I'd really need a citation on 'seen as very bad'.

Let’s take 401k as an example. You have to have a default position, so you can view it as nudging people either way you set it up. Either you set opt-in enroll, in which case you know participation will be lower and therefore you are effectively choosing to nudge people in a direction which is bad for their long-term prospects, or you choose to set it up with auto enroll, nudging people in the direction of helping their future selves.

I see this at work actually. Our cafes offer all sorts of drinks in little glass-fronted fridges. The top part of the glass is clear and shows all manner of flavored sparkling and still water. The bottom half is frosted glass which is where the sodas are hidden. :)