Helping Baby Boomer Generation Workers Save for Retirement
Approximately half of the Baby Boomer workforce does not have access to any kind of retirement savings plan at work.
Now Congress is considering a law that could change that.
The bipartisan Automatic IRA Act of 2007 would make it easy for workers to save by creating a retirement savings solution for the millions of Baby Boomer workers who are not offered an employer-based plan.
The legislation allows workers without employer-sponsored retirement plans to save for retirement through an automatic payroll deduction if their employer has at least 10 workers and has been in business for at least 2 years.
Employers would not make contributions nor be liable for the investment choices and would receive tax credits for providing the direct deposit mechanism.
A recent AARP Poll showed that 79 percent of workers without a work-based retirement plan are willing to have savings regularly deducted from their paychecks. The public clearly understands the urgency of the problem. Now it is time for Congress to act.
This legislation is especially timely considering that traditional pensions have been on the decline in recent years, making personal saving all the more critical for future retirees.
In fact, today there are 75 million employees who do not have a pension, 401(k), or profit sharing - basically no retirement plan through work. As a result, fewer and fewer Americans are feeling confident that they will have enough money to live comfortably during retirement.