Personal Finance and Investing

Employees can always Opt-Out of Auto-escalation (auto-increase) of their contribution rate from eligible pay, at enrollment time or anytime thereafter.

The key point being made by Vanguard is valid: most employees, especially those who aren't necessarily thinking about retirement right away, are likely missing out on higher investment returns by deferring less than the amount needed to maximize company match. Defaulting enrollment, coupled with auto-increase of deferrals, helps those who might otherwise not optimize their 401k benefit.

That said, many employees can't accept a 10-15% draw from their pay, even if not taxed. Vanguard (and other benefit providers) have a tendency to gloss over some employees' real-world financial challenges, and then focus mostly on those who are assumed to be "doing well".