Currently, 33% of Americans are not prepared for their own retirement. If Obama's proposal for a retirement savings program is enacted then 30 million Americans can have access to a retirement account.
President Barack Obama is busy making his lists as he prepares to pitch more new proposals to maximize access to retirement savings accounts. He also plans to revisit previous proposals when the budget will be issued next month.
According to the Federal Reserve report, one in three Americans are not prepared for retirement and that means not having any savings accumulated over the years or even a pension fund to tap for their later years.
In a statement released by the White House, President Obama's plan to expand the retirement savings program will enable over 30 million Americans to gain access to retirement accounts.
The plan requires employers to enroll employees to an Individual Retirement Account. As an incentive, employers who do this would get a tax credit of $3,000. This proposal was part of last year's budget but Congress did not approve of it.
Thomas Perez, United States Labor Secretary, aims to make this plan easy for for employers to engage themselves in this initiative of offering retirement plans to workers. The tax credit will be a means to lower their administrative expenses, especially for small employers. Perez explains:
We are willing to take steps to make it easier and cheaper for employers to offer a path to dignified retirement. They should be willing to do the right thing and set up more plans so their workers can save.
The White House is pressing Congress to pass the legislation. In the meantime, only a few states have approved a state-run retirement plan especially for private sector employees.
Obama has been working tediously to make saving for retirement easier for many workers.
Below is an clip from USA Today that reports on Obama's proposal for retirement plan changes.
