In his Feb. 25 address to Congress, President Obama stated that “to preserve our long-term fiscal health, we must also address the growing cost in …Social Security…while creating tax-free universal savings accounts for all Americans.” In the proposed 2010 budget, the President outlines two ways to help more Americans save for retirement: by “automatically enroll[ling workers] in workplace pension plans,” with the right to opt out; and, by requiring employers who do not offer a retirement plan to “enroll their employees in a direct-deposit IRA account that is compatible with existing direct-deposit payroll systems.”
In addition, the Budget proposes to expand retirement savings incentives for working families by modifying the existing Saver’s Credit to provide a 50-percent match on the first $1,000 of retirement savings for families that earn less than $65,000. The credit would be fully refundable to ensure that savings incentives are fair to all workers.
These proposals would go a long way towards increasing both the number of workers who save for retirement and the amount of personal savings that workers accumulate to supplement Social Security.