Those Golden Years we used to hear about might yet come to pass for some — if the Obama administration gets its message across. The New York Times’ Edmund L. Andrews reported Sunday on four new initiatives aimed at helping Americans put aside something for the rainy days of their retirement.
President Obama, noting that millions of Americans do not have enough savings to cover their retirement, announced a package of initiatives on Saturday to spur increased savings.
The administrative actions, which do not require new legislation from Congress, are intended to make it easier and more automatic for people to put money into tax-advantaged retirement accounts.
The new initiatives address a substantial audience. “Half of America’s work force doesn’t have access to a retirement plan at work,” Obama said. “And fewer than 10 percent of those without workplace retirement plans have one of their own.”
Based on “behavioral research,” the initiatives include savings-encouraging devices such as automatic enrollment plans for retirement savings accounts, check-off boxes on tax returns allowing for refunds in the form of U.S. savings bonds, or the payment of unused vacation time or overtime into retirement accounts.
White House officials said the new initiatives would go into effect immediately and come on top of two related proposals that Mr. Obama sent to Congress as part of his budget.
One would compel all but the smallest employers to offer retirement savings plans, and the other would expand the saver’s tax credit, which matches a family’s savings up to $1,000 a year.
Mr. Obama’s mother would probably be bewildered by the need for such initiatives. Savings devices, from employer-sponsored automatic enrollment plans to the ridiculous no-interest Christmas Club monthly deposits so popular with banks (and even with rational people who proclaimed this the only way to accumulate holiday funds), were ubiquitous a generation or two ago. They managed at least to keep a lot of people from going into credit card debt.
Perhaps, if the instant gratification/super-consumer movement can be made to co-exist with the President’s plans, some balance of spending and savings will return to working Americans. Now, if a few more Americans can just find jobs…
We may have to discover something that makes spending less fun and saving more interesting; these initiatives are just fun/interest-neutral. I do remember when such things were ingrained, though that seems a very long time ago. I also remember the Open-a-Savings-Account, Get-a-Toaster days; maybe they’ll make a comeback.
I read this piece as well with interest as Americans save so little, especially compared with almost every other country. Anything that makes it easier will help, although spending is so much more fun — instant gratification — and putting money aside for some indefinite future so much less interesting, even if it’s essential.
If all of us had to pay cash, or use a debit card, for every purchase but a car or home, we might have a very different scenario, but credit card companies are earning a fortune from our profligacy.