15 Year End Money Tips for 2015

The ball dropping in Times Square, the bungled singing of Auld Lang Syne and yes, year-end money tips…let’s get going! 1.  Sell winners in taxable accounts. If you expect your income to be higher next year, realize capital gains today at the lower rate. Your taxable income includes the gain, so factor that in when you make your decision.

2. Sell losers in taxable accounts. Losses offset gains that you have taken previously in the year; if you have more losses than gains, you can deduct up to $3,000 of losses against ordinary income. Be sure to avoid the "Wash Sale" rule, which precludes you from deducting a loss if you buy a "substantially identical" investment within 30 days.

3. Bunch itemized deductions. Many expenses can be deducted only if they exceed a certain percentage of your adjusted gross income (AGI). So try to bunch legal advice and tax planning, travel and vehicle costs into one year, so you exceed these the 2 percent floor.

4. Give appreciated stock or fund shares to charity. If you itemize deductions, you'll write off the current market value (not just what you paid for them) and escape taxes on the accumulated gains.

5.Use your gift tax exclusion. You can give up to $14,000 to as many people as you wish in 2015, free of gift or estate tax. If you combine gifts with a spouse, you can give up to $28,000 per beneficiary, per year.

6. Pay someone's education or medical bills.You can make unlimited payments directly to medical providers or educational institutions on behalf of others without incurring a taxable gift or dipping into your lifetime gift-tax exemption.

7. Fully fund your college savings 529 plan. Money saved in these programs grows tax-free and withdrawals used to pay for college sidestep taxes, too. You can invest up to $14,000 in 2015 without incurring a federal gift tax and many states offer state tax deductions for the contributions.

8.Fully fund employer-sponsored retirement plan contributions. The deadline for funding 401 (k), 403 (b) or 457 plans is December 31. This year, the limit is $18,000, plus an additional $6,000, if you are over 50.

9. Consider converting Traditional IRA into a Roth IRA. A conversion requires that you pay the tax due on your retirement assets now instead of in the future. Whether or not a conversion makes sense for you depends on a number of factors, the most important of which is whether or not you can pay the tax due with non-retirement funds.

10. Take Required Minimum Distributions. Generally, once you turn 70 ½, you must begin withdrawing a specific amount of money from your retirement assets (there are some exceptions). The penalty for not taking your RMD is steep -- 50 percent on the shortfall!

11. Consider a Qualified Charitable Distribution (QCD). One way to sidestep the taxation on your RMD is to make a Qualified Charitable Distribution, which allows you to gift up to $100,000 directly from your IRA to a charity without having to include the distribution in your taxable income. However, you swap having to claim the income for making a charitable deduction. As of this writing, lawmakers have not yet extended the QCD.

12. Estimate your 2016 Income. If you’re self-employed, and your tax bracket could rise next year, delay making tax-deductible business purchases until January, when the write-offs will become more valuable

13. Open a small business retirement account. If you open a qualified retirement account by December 31, you have until the day you file your taxes next year, including extensions, to make this year's contribution.

14. Adjust 2016 withholding. Stop the insanity of the interest free loans to Uncle Sam!

15 Start a filing system. Make this the year that you keep all your deductions/receipts organized and easy to find when April 15^th rolls around!

Solid Jobs Report = Fed Rate Hike

The government said that the U.S. economy added 211,000 jobs in November, which was the high-end of the predicted range of 160,000-220,000. There is now little doubt that the Federal Reserve will raise short-term interest rates when it meets in a week and a half. The three-month average of job creation stands at a solid 218,000 and year-over-year, 2.64 million jobs were added. Although 2015 average monthly job creation of 210,000 is less than last year’s strong pace of 260,000, it has certainly been strong enough to push down the unemployment rate from 5.8 percent a year ago, to a seven-year low of 5 percent. The broader measure of unemployment, which includes those who have stopped looking as well as those working part-time for economic reasons, edged up slightly to 9.9 percent, though remained under the key 10 percent level for a second consecutive month.

The Fed is also likely to be encouraged by the breadth of job gains, including the domestic-focused construction, retail and health care sectors. That said, two areas that continue to be under pressure are mining and manufacturing, both of which have been struggling under the triple whammy of lower oil prices, weak demand overseas and a stronger U.S. dollar. Another area of weakness is the still low level of working-age Americans who have jobs or are actively looking for work. The participation rate edged up to 62.5 percent, due to a 273,000 increase in the labor force, but because of demographics and the large number of would-be workers giving up their job searches, participation remains near 40-year lows.

Back to the good news...after a swift 2.5 percent annual increase in October, wages in November were up a still-respectable 2.3 percent from a year ago. In a separate report released by the government earlier last week, Q3 hourly compensation jumped by 4 percent in the third quarter, on an annualized basis and was up 3.6 percent compared to the same quarter a year ago. If that trend holds, hourly compensation is on track to rise by the largest amount since 2007 and when adjusted for inflation, the increase would be the fastest since 2000.

Overall, the results confirm that the economy continues to expand; the labor market is improving and workers are gaining leverage; and the Fed will soon hike interest rates for the first time in over nine years.

MARKETS: The US jobs report, along with promises of “no limit” on additional ECB stimulus measures, was enough to save what was shaping up to be a losing week.

• DJIA: 17,847 up 0.3% on week, up 0.1% YTD
• S&P 500: 2,091 up 0.01% on week, up 1.6% YTD
• NASDAQ: 5,142 up 0.3% on week, up 8.6% YTD
• Russell 2000: 1183, down 1.6% on week, down 1.8% YTD
• 10-Year Treasury yield: 2.28% (from 2.22% a week ago)
• Jan Crude: $39.97, down 4.2% on week
• Feb Gold: $1,084.10, up 2.6% on week
• AAA Nat'l avg. for gallon of reg. gas: $2.05 (from $2.09 wk ago, $2.79 a year ago)

THE WEEK AHEAD: December 9^th marks the 50^th anniversary of the debut of “A Charlie Brown Christmas”. The image of the sad little Christmas tree that Charlie and Linus selected may be a good symbol of the U.S. economy. At first glance, it seems a little thin and wobbly, but upon further reflection, it’s not “such a bad little tree. It's not bad at all, really. Maybe it just needs a little love.”

Mon 12/7:

Tues 12/8:

6:00 NFIB Small Business Optimism

10:00 Job Openings and Labor Turnover (JOLTS)

Weds 12/9:

Thursday 12/10:

8:30 Import/Export Prices

Friday 12/11:

8:30 Retail Sales

8:30 PPI

10:00 Business Inventories

10:00 Consumer Sentiment

#248 Year End Money Moves with Ed Slott

Ed Slott, CPA is a nationally recognized IRA expert, television personality and best-selling author who has dedicated his life to educating Americans on saving for retirement and the intricacies of IRAs.  He was named “The Best Source for IRA Advice” by The Wall Street Journal and is the author of numerous best-selling books, which is why we are so happy he joined the show to help you make smart, year-end money moves.

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 Ed covered a lot of ground, including a great rule of thumb about filing for Social Security: "The longer you wait, the more you get!" Here's a quick list of things to remember to maximize the remaining days of 2015:

• Make your 2015 Roth IRA conversion and consider a back door conversion, if you earn too much money to qualify for a contribution
• Check the taxes on stock or mutual fund sales; use losses to offset gains
• Max out your retirement accounts (yes, there's still time to get to $18,000 or $24,000 if you are over age 50)
• Take Required Minimum Distributions: RMDs must start in the year you turn 70 1/2 or the year. Fail to do so and the amount you should have withdrawn will be taxed at 50 percent!
• Donate your IRA distributions to charity: Although this is still in limbo, Ed recommends that you take advantage of it and assume that Congress will once again make it part of an extender package
• Check / Update Beneficiary Forms
• Bunch your deductions and if you are self-employed, project your 2016 income. If it will be higher than 2015, consider deferring income and expenses until next year, when you are in a higher tax bracket
• Be aware of stealth taxes

Check out Ed's web site www.IRAHelp.com for more information!

Thanks to everyone who participated this week, especially Mark, the Best Producer in the World. Here's how to contact us:

• Call 855-411-JILL and we'll schedule time to get you on the show LIVE 

• Send an email: askjill@jillonmoney.com 

• Tweet us: @jillonmoney and @MTalercio

Giving Tuesday: Charitable Giving Tips

As the year comes to a close, charities are stepping up their fundraising efforts, starting with Giving Tuesday campaigns. While philanthropy is a wonderful way to promote causes about which you care deeply, there have continued instances of fraud associated with this time of year. The IRS has raised the red flag about charitable scams, especially those that use recent disasters and tragedies to try and steal money or extract private information from well-intentioned people. “Their schemes include contacting people by phone, social media, email or in person and pretending to be from a charity that helps disaster victims.” The increase in fraud means that you need to do a little work, before you give. Start by confirming the group’s name to determine it’s legitimate. Even if it is a genuine non-profit, there could be a case of mistaken identity. There are hundreds of organizations devoted to children or cancer, so go to the group’s website to see how it spends its money. You can also see what others say about the organization by going to the Better Business Bureau’s (BBB) Wise Giving Alliance, Charity Navigator, Charity Watch, and GuideStar.

The Federal Trade Commission recommends that you just say NO to any solicitation if the representative asks for money, but refuses to give you full details about the group’s identity, mission, costs and how it will use your donation; uses high-pressure tactics, like trying to get you to donate immediately, before you can do research or think it over; asks you to send cash or use a money transfer; offers to send a courier or overnight delivery service to collect the donation immediately; promises to enter you in a sweepstakes or give you a prize for donating; won't provide proof that a contribution is tax deductible; uses a name that closely resembles that of a better-known, reputable organization; or thanks you for a pledge you don’t remember making.

To ensure that you are donating to a qualified charity, which is entitled to a tax deduction, you can use the Exempt Organizations Select Check tool at IRS.gov. You can also find legitimate charities at fema.gov. Officials note that you should never provide your Social Security number, credit card and bank account numbers or passwords to anyone who solicits a contribution from you. If you think you’ve been the victim of a charity scam or if a fundraiser has violated Do Not Call rules, file a complaint with the Federal Trade Commission.

Once you have determined that the organization is legitimate, you will want to know that its finances are healthy and that it is efficient, ethical and effective. Charity Navigator provides 0 to 4-star rating system, which includes a review of each charity’s fiscal performance. The site also helps you understand what portion of your donation goes to support overhead, versus goes to the cause itself.

If the donation qualifies and if you itemize your tax deductions, charitable contributions made to qualified organizations may help lower your tax bill. Procrastinators take note: to qualify for write-offs of charitable contributions, your payments must be postmarked by midnight December 31^st -- just writing “December 31st” on the check does not automatically qualify you for a deduction; and pledges aren’t deductible until paid. Donations made with a credit card are deductible as of the date the account is charged.

You should maintain a bank record or written communication from the organization containing its name, the date and amount of the contribution. For text message donations, flag the telephone bill with the name of the receiving organization, the date of the contribution, and the amount given.

All of this may seem like a little more work than you might have hoped, but your time and generosity will pay long-term dividends.

For Investors, Two Days Remain in 2015 (Jobs, FOMC)

Although the calendar says 33 days to go before we ring in 2016, for investors, there are exactly two days left in 2015: Friday, December 4^th and Wednesday December 16^th. Oh sure, there will be navel gazing over the results of the holiday shopping weekend. FYI, as it turned out, those door busters were a bit of a bust in brick and mortar stores, but they sure were effective in the digital arena. ShopperTrak reported that in-store traffic was down, but Adobe Digital index said consumers spent 14 percent more on Black Friday than last year and Thanksgiving online spending saw a 22 percent surge.

Regardless of the total holiday sales results, which will not be available for another month, there are far more important events ahead for the economy. Back to those two days…on Friday, the government will release the November jobs report. After a better than expected reading in October, when the economy added 271,000 jobs, the unemployment rate edged down to 5 percent and average hourly earnings increased by 2.5 percent from the previous year, hopes are high for follow through in November.

Economists predict nonfarm payrolls will rise by 190,000, with a range of 160,000-220,000. The unemployment rate will likely hold steady at 5 percent and earnings growth should slow from the quicker than expected pace in October, but is expected to show continued progress. .

If the jobs report comes in even at the low end of predictions, it would probably be enough ammunition for the Federal Reserve to raise interest rates at its two-day meeting, which concludes on the last important day for investors, December 16^th. Janet Yellen will have two opportunities this week to pre-sell the rate hike: a speech before the Economic Club of Washington DC and testimony before the Joint Economic Committee of Congress. Although lawmakers will try to flex their muscles and attempt to prod Yellen to elaborate on the Fed’s plans, don’t expect her to give away much more than she has already stated in public.

Although these two days will be pivotal, that is not to say that there will not be volatile trading days in the month of December. As asset managers reposition their portfolios for the year-end, there is always the possibility for a low volume swing in either direction. There is also likely to be continued chatter about the narrowness of leadership in stocks. The FANG stocks (Facebook, Amazon, Netflix and Google) are said to account for gains of about 60 percent this year, while the S&P 500 and NASDAQ Composite are up 1.5 and 8.3 percent respectively.

MARKETS: While you were surfing the web on Black Friday, you may have missed a 5.5 percent drop in the Chinese stock market. The plunge was attributed to a government investigation into brokerage firms, which is part of a broader legal, regulatory and anti corruption crackdown, following a year of market swoons. Even with the late-week sell-off, the Shanghai Composite is 21 percent above its calendar year nadir on August 26^th, though still remains 34 percent below its seven-year high on June 12^th.

• DJIA: 17,798 down 0.1% on week, down 0.1% YTD
• S&P 500: 2,090 up 0.1% on week, up 1.5% YTD
• NASDAQ: 5,127 up 0.5% on week, up 8.3 % YTD
• Russell 2000: 1202, up 2.5% on week, down 0.2% YTD
• 10-Year Treasury yield: 2.22% (from 2.26% a week ago)
• Jan Crude: $41.71, down 0.6% on week
• Feb Gold: $1,056.20, down 1.3% on week (lowest level in more than five years, down 45% from peak 4 years ago)
• AAA Nat'l avg. for gallon of reg. gas: $2.05 (from $2.09 wk ago, $2.79 a year ago)

THE WEEK AHEAD:

Mon 11/30:

Cyber Monday

9:45 Chicago PMI

10:00 Pending Home Sales

10:30 Dallas Fed Manufacturing

Tues 12/1:

Giving Tuesday

Motor Vehicle Sales

9:45 PMI Manufacturing

10:00 ISM Manufacturing Index

10:00 Construction Spending

Weds 12/2:

8:15 ADP Private Employment Report

8:30 Productivity

2:00 Fed Beige Book

Fed Chair Janet Yellen speaks at the Economic Club of Washington DC

Thursday 12/3:

10:00 Factory Orders

10:00 ISM Non-Manufacturing Index

10:00 Fed Chair Janet Yellen testifies before Joint Economic Committee of Congress

Friday 12/4

8:30 November Employment Report

8:30 International Trade

#247 The Thanksgiving Show

Guest Hart Lambur, CEO and co-founder of Openfolio joins the show to discuss how investors can make smarter, more confident investment decisions by sharing their portfolios with one another.

• Download the podcast on iTunes
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Thanks to everyone who participated this week, especially Mark, the Best Producer in the World. Here's how to contact us:

• Call 855-411-JILL and we'll schedule time to get you on the show LIVE 

• Send an email: askjill@jillonmoney.com 

• Tweet us: @jillonmoney and @MTalercio

Financial Thanksgiving 2015

Thanksgiving is a time when we count our blessings. In addition to the big stuff, I like to use the opportunity to give thanks to the resources and organizations that improve our financial lives. The Financial Planning Coalition, a collaboration of the Certified Financial Planner Board of Standards (CFP Board), the Financial Planning Association (FPA), and the National Association of Personal Financial Advisors (NAPFA) has provided a strong and unified voice promoting the recognition and regulation of financial planners and increased investor protection. The big task that the Coalition has been trying to tackle is to educate policymakers and consumers about the importance of advice that is in the best interest of the client—the so-called fiduciary standard.

The coalition’s tireless efforts may soon pay off…next on my list of thanks goes to the United States Department of Labor, which is expected to finalize rules that would require financial advisors of all retirement accounts to put customers first. Although the industry has fought hard to thwart the initiative, most believe that it will survive. Its enactment would amount to the biggest changes to the Employee Retirement Income Security Act (ERISA) since that law was drafted more than 40 years ago.

Thanks too must go to technology, which has greatly enhanced the ability to better manage personal finances. Mint, You Need A Budget (YNAB) are among the many free apps that help you keep track of your money, while Acorns and Level Money help you budget and then find even the smallest dollars that you can save or invest.

And a tip of the hat goes to the innovators of financial technology, like the folks at Betterment, Wealthfront, Motif investing and MarketRiders, who have introduced a cost efficient way for investors to better allocate and manage their investments and retirement accounts.

There are also plenty of terrific tools available to help people with their financial lives. The EBRI Choose to Save Ballpark Estimate is an easy to use calculator to help quantify retirement savings needs, FinAid is the go-to site for students and their families to help understand the various ways to pay for college; and LifeHappens helps families understand their life and disability insurance needs.

I am often asked about which financial blogs that I use to augment the multitude of publications that I need to do my job. I am thankful for the terrific work of Bill McBride of the Calculated Risk blog. In addition to his wise insights about the housing market, Bill has a wonderful way of providing much need context to a world of economic numbers. I am also grateful for Barry Ritholtz’ “The Big Picture”, with its great mix of information, humor and a healthy dose of skepticism. Although a bit wonkier, I always learn from economics professors James D. Hamilton and Menzie Chinn, who are the brains behind Econbrowser and Mark Thoma of Economist’s View.

What would I do without economic resources, like the Federal Reserve Bank of St. Louis’s Reserve Bank FRED blog, with its nifty charting features; the Federal Reserve Bank of New York’s research on Household Credit; the Bureau of Labor Statistics’ historic databases; the Bureau of Economic Analysis’ interactive data; and the IRS’ rich web site? The people at these organizations have also been incredibly generous with me.

On the research front, the folks at Pew Research Center, the Center for Retirement Research at Boston College and the Georgetown Center on Education and the Workforce are producing some of the most interesting and useful publications, which help me in my job every day.

And finally, the greatest thanks goes to you—the readers, listeners and viewers, who take time out of your days to absorb my content and who generously provide commentary, both and good and bad. To quote Alice Walker, the words thank you “expresses extreme gratitude, humility, understanding.” On this Thanksgiving, thank you.

Thanksgiving Week Holiday Shopping

American consumers, start your engines! This weekend kicked off the holiday shopping season and here is what you need to know. Despite the rapid growth of digital sales (the government said that overall E-commerce jumped 15.1 percent in the third quarter from a year ago), most shopping occurs in physical stores. In fact, last quarter, E-commerce accounted for just 7.4 percent of overall retail sales. But these numbers are somewhat misleading, because overall retail sales include the big-ticket automobile category, as well as gas and groceries. According to consultancy Strategy&, these groups are responsible for almost half of total retail sales. Without them, online’s penetration of its “addressable market” is closer to 16 percent.

But that’s not the whole story: Deloitte found that nearly two-thirds of in-store retail sales will be influenced by digital interactions this holiday season, as consumers smarten up and conduct research on their desktops, tablets and phones and consult shopping apps to land the best deals.

Speaking of those bargains, shopping early can pay off. According to Adobe Digital research, online prices should hit rock bottom on Thanksgiving Day, where consumers will snag an average discount of 27 percent. So if you are one of the 45 percent of consumers who can sneak away in between football games and family time to click away, you’ll be rewarded.

If shopping on Thanksgiving -- even from the privacy of your home -- doesn’t sit well with you, try the Monday before Thanksgiving, which has been a good option to beat the rush and still get deals. Adobe also found that the best time to buy depends on both discounts and product availability, especially for hot-selling gifts. In fact, this weekend is the best time to shop for toys and Monday is good for electronics, though the entire week leading up to Thanksgiving will deliver bargains.

Before you hit the stores, don’t forget to download a few apps to help: Red Laser, Snip Snap and Coupon Sherpa can help you score the best deals and find extra savings and Slice keeps tabs of your online purchases by monitoring your email and extracting online order details. The app also notifies you about price drops on recent purchases and helps you get a refund when possible.

Finally, a quick word about security…when shopping in a brick and mortar location, the safest choice is cash at the checkout counter, but that too has risk, because who really wants to shop with wads of cash? For convenience, credit cards are the safest option because issuers usually provide protection against stolen, damaged or lost items. Additionally, if credit card information is stolen or compromised, your liability is minimized, whereas a debit card thief could drain your bank account before you notice.

And during this time, carefully review your credit card statements as soon as you receive them to make sure there aren’t any unauthorized charges. If there is a discrepancy, call your bank and report it immediately. If you think that your information has been compromised or that you have been a victim of identity theft, go to the FTC website for step-by-step instructions about what you need to do.

MARKETS: The bulls had visions of Sugar Plum fairies this week, as stocks reversed most of the previous week’s losses.

• DJIA: 17,823 up 3.4% on week, up 0.2% YTD
• S&P 500: 2,089 up 3.3% on week, up 1.5% YTD (best week in almost a year)
• NASDAQ: 5,106 up 3.6% on week, up 7.8% YTD
• Russell 2000: 1175, up 2.5% on week, down 2.5% YTD
• 10-Year Treasury yield: 2.26% (from 2.28% a week ago)
• Dec Crude: $40.39, down 0.9% on week
• Dec Gold: $1,076.30, down 0.4% on week (fifth straight weekly drop)
• AAA Nat'l avg. for gallon of reg. gas: $2.09 (from $2.18 wk ago, $2.84 a year ago)

THE WEEK AHEAD:

Mon 11/23:

8:30 Chicago Fed Nat’l Activity Index

10:00 Existing Home Sales

Tues 11/24:

8:30 Q3 GDP (2^nd Estimate)

9:15 Case Shiller Home Price Index

10:00 Consumer Confidence

Weds 11/25:

8:30 Personal Income and Spending

8:30 Durable Goods Orders

10:00 New Home Sales

10:00 Consumer Sentiment

Thursday 11/26: THANKSGIVING DAY-ALL US MARKETS CLOSED

Friday 11/27: BLACK FRIDAY

1:00 U.S. Markets close early

#246 The Holiday Shopping Show

Ladies and Gentlemen, start your engines...holiday shopping season begins RIGHT NOW. I provide some tips as to when to score the best deals and give you permission to take a break from football and family to shop from the privacy of your own home on Thanksgiving Day -- especially to snag that average discount of 27 percent!

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Out guest James Nichols is the head of Retirement Income and Advice Strategy for Retirement for Voya Financial, but we prefer the title, "Retirement Yoda". James talked about the Voya Born to Save program, where any child born on October 19th 2015 can receive $500 from Voya! James also discussed great ways to break down financial goals by key life stages and milestones.

Thanks to everyone who participated this week, especially Mark, the Best Producer in the World. Here's how to contact us:

• Call 855-411-JILL and we'll schedule time to get you on the show LIVE 

• Send an email: askjill@jillonmoney.com 

• Tweet us: @jillonmoney and @MTalercio

Financial Nudging Works!

Having a hard time saving for retirement? You aren’t alone. The problem is that unless we automate the process, saving often becomes an afterthought. And who can blame you? It’s way more fun to go out to dinner, take trips and buy tech toys then to stash that money into a long term saving or investing vehicle. But what if you never got a chance to get your hands on the dough – would you miss it? Many retirement plan sponsors are testing this theory in practice. The trend started with the passage of the Pension Protection Act of 2006 (PPA). In addition to addressing issues around defined benefit or pension plans, the law also contained big changes for employer-sponsored retirement plans.

After years of low enrollment levels (according to the Employee Benefit Research Institute, roughly 30 percent of workers who had been offered a 401(k) plan at work failed to participate in it, and many workers made no change to their contribution rate or investment choices once they did sign up), retirement experts along with academics who study behavioral finance (the intersection of psychology, sociology, business and economics), petitioned the government to help nudge employees into better financial behavior.

In the PPA, the Department of Labor blessed the automatic enrollment of workers into defined contribution retirement plans at a default savings contribution rate (usually 3 percent); default investment elections into age-appropriate “life-cycle” or “target date” funds; and automatic escalation of workers' contributions to their 401(k) accounts on a periodic basis.

Of course employees could always opt out of a retirement plan, elect a different contribution rate, or choose different investments, but to do so would require taking action. And given human nature, you can guess what happened: more employees have participated in retirement plans and the shift also helped workers form the retirement savings habit early in their careers, a critical step to staying on course to hit financial goals, according to behavioral economists.

According to the Bureau of Labor Statistics, one study found a whopping 48-percentage point increase in participation among newly hired employees and the BLS itself found that plans with automatic enrollment have participation rate that is 8.4 percent higher than do plans without the feature. “Automatic enrollment has been particularly successful at increasing 401(k) participation among employees least likely to participate in retirement savings plans—namely, employees who are young, lower paid, black, or Hispanic.”

In fact, as much as we hate it in the moment, most of us respond pretty well to gentle nudging. Last year, American Century Investments conducted a survey of soon-to-be retirees and found that they would have liked their employers to play a more active role in helping to save for retirement. Maybe this kind of thinking only comes with hindsight, but when asked exactly what they wanted their companies to do, two in five said “a slight nudge,” while an additional two in five preferred either “a strong nudge” or a “kick in the pants.”

Some employers have responded with something in between a gentle nudge and a kick in the pants. A small group of companies are carrying behavioral finance to the next level by auto enrolling participants at an 8 or even 10 percent level. They report that the employee response has been pretty much what you might expect: they accept it.

The beauty of any automatic saving or investing plan is that it takes the onus off of you to do something and maybe even alleviates that low level of guilt that might be kicking around your head that you should be doing more. In fact, whenever possible, consumers seem to reap the benefit of financial nudging, whether in retirement contributions, automatic rebalancing of investment accounts or automatic bill paying. Whenever we can extract the emotional pull of inertia from the process, we are likely to be better off.