That’s not our idea, but one pushed by a recent article in the Washington Post. However, the article raises legitimate issues that everyone can agree on such as lack of access to retirement savings vehicles at work as well as the inadequacy of savings rates. Here’s the article: http://www.washingtonpost.com/blogs/wonkblog/wp/2014/05/20/how-to-get-people-saving-in-america-again-obamacare-for-retirement-accounts/
Many well-meaning people are trying to solve these problems with various solutions. At the federal level, President Obama ushered forth his MyRA solution. But the real action these days is taking place at the state level with no less than twelve states attempting to implement a savings program for private sector employees.
The article in the Washington Post summarizes this movement: “There’s a more simple idea, though: Just roll them all into one gigantic savings plan. That’s it, one step, no hassle, done.”
It certainly would be nice if it were that simple but the proposals at the state level are anything but that. Some might take that as a knock, but can anyone name a large state program that is simple, easy and can be achieved in just one step?
We do think that government actually solved the issue of retirement savings coverage a long time ago but then forgot about that solution. Before the rise of the 401(k) plan, payroll deduction IRAs were a popular savings vehicle in America because they were a simple and easy program for employers and their employees. But somewhere along the way, the 401(k) plan supplanted payroll deduction IRAs as the most popular retirement savings program.
Anyone who has operated or sponsored a 401(k) plan, however, knows that they can be complicated and costly to maintain. And did we mention employer fiduciary responsibility attaches to 401(k) plans? It is no wonder that approximately half of the businesses in the United States do not offer one.
In fact, the long-forgotten payroll deduction program that preceded the 401(k) plan may be the simplest and most cost effective way for employees to save for retirement.
As the article in the Washington Post points out, the idea of an Obamacare for retirement savings is a tough one to swallow now. But we don’t think any employer needs to take that medicine to help their employees save for retirement. There is a much simpler way to do it now, and you don’t have to wait for state governments to launch their programs. It’s called MYworkIRA!
FIND OUT MORE ABOUT A PAYROLL DEDUCTION IRA – FIND OUT ABOUT MYworkIRA (link to form asking for more information)
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