Obama Retirement Plan: White House to Help 30 Million Access Plans
President Obama has a plan that his administration says may help 30 million more Americans gain access to retirement savings plans.
The president is expected to outline the Obama retirement plan in his fiscal 2017 budget.
Currently, one-third of all working Americans do not have access to a retirement plan through their jobs, according to the White House. That statistic includes 75% of people working part-time and 50% of the small business workers.
Additionally, Americans are very unlikely to save for retirement on their own if they are not given access to a retirement plan through their employer, the White House says. Only 10% of working Americans without an employer plan put aside savings in their own retirement accounts.
How the plans will help
One of the Obama retirement plan expected proposals would make it easier for different small businesses to come together and provide retirement savings plans for their employees, The Hill reports. Specifically, the president is hoping to enable more employers to share the costs of administering retirement savings plans for their workers.
Obama is also expected to propose tax credits for employers who provide or expand their retirement coverage, as well as making it easier for part-time workers to gain access to retirement plans. Additionally, the administration is expected to to propose requiring employers that do not provide their own retirement plans to enroll workers in individual retirement accounts (IRAs) automatically.
Obama is also planning to create new rules that make it easier for individual states to come up with their own ideas to increase retirement saving.
How you can help yourself
Providing people with increased access to retirement savings plans can be beneficial, but problems with saving for retirement are more related to individuals’ behavior, according to some certified financial planners. As humans, we aren’t very good savers to begin with.
So, what are some steps an employee can take if his or her employer doesn’t offer a retirement savings plan?
First, the employee can ask his or her employer why they don’t have one, says Corey Purkat, a certified financial planner who is also the founder and CEO of Northwoods Fiduciary Advisors in Minneapolis.
The question might prompt the employer to reconsider, but regardless of whether a plan is offered, ultimately the employee always has the option to start his or her own retirement plan.
“At the end of the day, we have to be responsible for ourselves,” Purkat says.
The bottom line? Saving money for retirement can be inherently difficult.
“Saving takes discipline,” he explains.
Still, there’s hope that more and more private employers will begin to offer retirement savings plans.
“I believe that the private industry is doing a much better job of having retirement plans in place for businesses, and more and more businesses are starting to add retirement plans every single day,” Purkat says.
If you are on your own, using a retirement calculator can help you know how much to save — which can be a great motivator for saving.