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Maybe You’ll Be Able to Retire After All – The New York Times

 Millions of people moved closer to a secure retirement last week when the Labor Department issued guidelines to help states establish savings plans for private-sector employees who do not have retirement benefits through their jobs. President Obama called for the guidelines in July. 

The states are trying to increase retirement savings because Congress has largely failed to do so. Lawmakers in Washington have focused mainly on making 401(k)s and other employer-provided retirement plans more lucrative for affluent savers — and for the Wall Street financial firms that manage the money — rather than addressing the larger issue of access to coverage, the fees paid to middlemen and other obstacles that have left most American workers without adequate retirement savings and, as a result, unprepared to retire. 

Currently, about half the states are developing plans. The most robust plans, in California and Illinois, rely on payroll deductions that are pooled and professionally managed, an approach that reduces costs and investing mistakes. 

Costs will also be controlled by a fee cap of about 0.75 percent of the money invested. That is not cheap, but it is intended as an upper limit, not the typical cost.

Source: Maybe You’ll Be Able to Retire After All – The New York Times

Just what we need; more confusion about retirement saving and now getting the States in on the act, several which by the way can’t even manage their own pension funds. Who the hell would turn over their retirement to the state of Illinois⁉️

Millions of people didn’t move closer to anything by the US DOL finding a new way to circumvent ERISA; the federal law that governs retirement plans. California requires small business to take payroll deductions for a state-run plan unless workers opt out, the funds are guaranteed by the state. Have they created yet another liability they (taxpayers) can’t handle? 

There are already several types of IRAs for different purposes and you can always use direct deposit or automatic withdrawal to fund an IRA. 


Please tell me why we think adding more plans to the already complicated and confusing mix will help people save for retirement? Politicians are tripping over themselves pandering to voters and doing more harm than good. 

Then of course we have this which the Obama administration promoted a couple of years ago. So what happen to the:


The fact is, nothing is stopping people from saving for retirement … except perhaps their own indifference, poor planning and inability to sort out needs, wants and desires. Save first then set your lifestyle. 

Until we resolve the motivation issue, more plans aren’t going to help one bit, quite the opposite in fact. 


2 replies »

  1. I do not understand why the government limits the IRA to $5500 + $1000 over age 50 when an employer 401K plan can go $18000+ $6000 over age 50. The government will get its’ tax money sooner or later. If people do not get a chance to save more then the government may be helping poor retirees in either direct or indirect public assistance and I am betting that they will spend more tax money than what they would of collected in taxes in the first place.


  2. More plans for what? I do think the $5500 limit should be raised for people who only have an IRA as a retirement plan. If you are in a 25% tax bracket it only saves you $1375 in taxes. And you will have to pay taxes when you retire and start using those inflation tarnished dollars. Only politicians can over complicate something as simple as retirement savings.


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