The lesson from behavioral economics is that people only save if it's automatic.

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.

Rip Van Winkle would be the ideal stock market investor: Rip could invest in the market before his nap and when he woke up 20 years later, he'd be happy. He would have been asleep through all the ups and downs in between. But few investors resemble Mr. Van Winkle. The more often an investor counts his money - or looks at the value of his mutual funds in the newspaper - the lower his risk tolerance.

If people just put away what's left at the end of the month, that's a recipe for failure.

Retirement savings is probably behavioral economists' greatest success story. It is a prototypical behavioral-economics problem because saving for retirement is cognitively hard - figuring out how much to save - and requires self-control.

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

Every American worker should be able to save for retirement via payroll deductions.