What are auto-enrollment and auto-escalation in a 401(k)?

These are default features designed to get you saving without you lifting a finger. With auto-enrollment, your employer automatically signs you up for the 401(k) at a starting rate — often 3% to 6% — unless you opt out. Under SECURE 2.0, many new plans must auto-enroll at 3% to 10% and use auto-escalation. Auto-escalation then bumps your contribution rate up automatically each year, typically by 1%, until it hits a cap like 10% or 15%. The upside is powerful: inertia works for you instead of against you, and most people never notice the gradual increases. The catch is that default rates are often too low to fund a comfortable retirement, and you may be invested in a default target-date fund. Treat the defaults as a floor, not a finish line — log in and raise your rate toward 15% of pay.