Finance

The Auto I.R.A. Is Gaining Traction as a Retirement Savings Option

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In Illinois, labor force participation continues to rise despite the economic chaos caused by the coronavirus. As of March, Illinois Secure Choice had 60,000 funded accounts valued at $ 17.2 million. By November those numbers had risen to $ 77,000 and $ 42.8 million.

“To me, it highlights the value of these programs and the importance of access,” said Courtney Eccles, director of Illinois Secure Choice.

As auto IRAs gain a foothold across the country, critics have surfaced. “It’s hard to say that giving people a chance to save is a bad thing, but I would have preferred it had been more thought-provoking,” said Andrew G. Biggs, a researcher at the American Enterprise Institute. a conservative thought Panzer and former deputy chief director of the Social Security Administration.

“One danger I see is that if you offer these plans, employers who offer 401 (k) may stop doing so,” he said, as employers cannot meet employee contributions. “If you’re a start-up, you could say, ‘Just put me in the auto IRA.”

Additionally, Mr. Biggs said, “If you’re a low-income person, you likely need to fry bigger fish” than saving for retirement. As a partial solution to the austerity crisis, he recommends increasing social security benefits for low-income workers “quite significantly”.

However, employers like Ms. Geske, who also saves Secure Choice, are relieved to have this option.

“I’m 51 years old, and before this program came out, I didn’t have any retirement plans,” she said. “I put everything I had into the business. Now I’ve checked my balance and see that I’m actually making money that I don’t even miss, and I’m giving myself a kick for not starting earlier. “

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