The assumption that everybody will figure out how much they have to save and then will just implement that plan is obviously preposterous.

Recall that people like to do what most people think it is right to do; recall too that people like to do what most people actually do.

There's a second component of a good savings plan, which is something that a colleague of mine called Schlomo Benartzi and I developed many years ago, that we call "save more tomorrow."

One simple step firms can take is make sure that people that are getting paid a lot of money, say more than a million or two, that a big chunk of that money is deferred. That's going to change the whole ballgame.

People exaggerate their own skills. they are optimistic about their prospects and overconfident about their guesses, including which managers to pick.

So the world is much more correlated than we give credit to. And so we see more of what Nassim Taleb calls "black swan events" - rare events happen more often than they should because the world is more correlated.

So, what's a nudge? A nudge is some small feature of the environment that attracts our attention and alters our behavior.