Thirty-nine million Americans work for an employer that offers no payroll-deduction retirement savings plan. Many of them are saving little or nothing. By the time they reach retirement age, they will face a stark choice between dependency on government programs and genuine hardship. That is not an outcome any compassionate person should be comfortable accepting.

So what do we do about it? This is where it gets philosophically interesting.

The “Automatic IRA” proposal makes auto-enrollment the default for workers at firms without existing retirement plans. Contributions increase gradually over time. A low-cost index fund serves as the default investment. Crucially — and this matters enormously — workers can opt out at any time. No one is forced into anything.

The principled objection is worth taking seriously. An opt-out default, critics argue, is a form of manipulation — engineering behavior through inertia rather than persuading through reason. It’s a fair point. There is a meaningful difference between a policy that empowers people and one that merely steers them, however gently, toward outcomes someone else has decided are good for them.

And yet. Thirty-nine million people. Saving nothing. The purely voluntary alternative — trusting that people will independently seek out and open IRAs on their own — has had decades to work. It hasn’t. Not because people don’t want financial security, but because inertia, complexity, and the tyranny of the immediate conspire against long-term planning for almost everyone.

The case for the Automatic IRA isn’t that government knows best. It’s that a soft default — fully reversible, privately administered, with the individual retaining complete control — is a far better answer than doing nothing until the crisis arrives, and then watching far more coercive and expensive interventions become politically inevitable.

Imperfect? Absolutely. Worth serious consideration? Yes. The measure of any policy isn’t whether it’s philosophically pristine — it’s whether it actually helps people while preserving their freedom to choose. On that test, this one earns a passing grade.

We can still do this.

Fascinating article …

The key point here is not that people are irrational; it’s that this irrationality comes from a very rational place. People fail to distinguish what they know from what others know because it is often impossible to draw sharp boundaries between what knowledge resides in our heads and what resides elsewhere.

That individual ignorance is our natural state is a bitter pill to swallow. But if we take this medicine, it can be empowering. It can help us differentiate the questions that merit real investigation from those that invite a reactive and superficial analysis. It also can prompt us to demand expertise and nuanced analysis from our leaders, which is the only tried and true way to make effective policy.

A better understanding of how little is actually inside our own heads would serve us well.