from Wiktionary, Creative Commons Attribution/Share-Alike License.
- verb intransitive To
savetoo little money.
Sorry, no etymologies found.
With an IRA you are likely to either over save at the start of your retirement for fear of living long or undersave and not discover it before you are too old to do anything about it.
But if I undersave, I run out of money and am poor in my old age.
If it is human nature to undersave for retirement then you have an economic argument for paternalism where a gov't policy makes people better off than simply letting them do their own thing.
Most people, for example, don't understand the effects of compounding of interest -- which leads them to undersave and to overborrow -- a basic human failing that some financial institutions have an incentive to exploit.
In addition, the “forced savings” which the bond would require could actually improve overall economic performance in economies like the U.S. that chronically undersave.