Obama, McCain agree: A new approach is needed for retirement saving
October 29th, 2008
Here’s some late-breaking news: John McCain and Barack Obama agree on something.
I stumbled across this startling information while reporting on a proposal making the rounds in Washington aimed at creating new retirement saving options for lower-income Americans.
Called the Automatic IRA, it could keep millions of Americans out of poverty in old age. It gets at one of the toughest challenges to retirement saving–the simple fact that half of the country’s working population doesn’t have access to a workplace retirement savings plan.
The Automatic IRA concept enjoys bi-partisan support. It proposes creation of a new retirement savings vehicle for the 75 million Americans who don’t have access to 401(k) plans where they work. That’s because they work for employers–mostly small businesses–that don’t sponsor 401(k) plans, mainly due to the expense of administering and matching contributions.
A number of retirement policy experts believe the solution lies in creating a public-private IRA option for these workers–a defined contribution cousin to the Social Security system.
Several proposals are floating around but one of the most interesting is the Automatic IRA plan proposed by a group called the Retirement Security Project (RSP). It’s a non-partisan organization whose principals include two of the nation’s top experts on retirement policy–J. Mark Iwry of the (liberal) Brookings Institution and David C. John of the (conservative) Heritage Foundation.
Read more about the Automatic IRA in this week’s RetirementRevised column.
