Let All Save
I read several articles recently about MyRA and State sponsored programs written by retirement industry professionals and organizations where their words seemed to take on a cynical tone instead of one of encouragement to the reader to look further into the programs. My belief is that their words can discourage Advisors and others to explore, understand and bring information to all individuals and employers to promote retirement savings.
Typically, a for profit employer will sponsor a retirement program only after a period of time proving that they have what it takes to continue in business. With an employer only retirement saving system we can guarantee ourselves as a nation that we will always have too high of a percentage of individuals not-covered by an employer sponsored retirement program, and therefore a high probability of them not saving for retirement.
With MyRA, IRAs, State and employer sponsored plans there is no reason for all individuals to settle on a retirement savings method. And low income Americans may qualify for The Retirement Savings Contributions Credit for contributing. https://www.irs.gov/uac/Get-Credit-for-Your-Retirement-Savings-Contributions
We have the tools, what we lack is awareness and action by all. Awareness and action by individual investors, and retirement industry professionals. As industry professionals we should communicate to those employers who don’t or won’t sponsor a group plan about other options for their employees to save. Options without cost, contributions and fiduciary responsibility for the employer. Plus the program can benefit them by attracting and retaining employees similar to any other benefit program they may sponsor. We need to promote the savings habit early and often with all.
Employers are and should remain the center piece of the American retirement savings system. They have the ability to sponsor a retirement plan and can always facilitate payroll deduction of an individual’s retirement savings along with group dissemination of information. By the way, MyRA can also be funded from the individuals checking or savings account and tax refund. And with the maximum lifetime limit of $15,000, individuals are incubating Roth IRAs for the private sector to serve. So let’s understand all available options and promote the program that makes most sense for any given employer so all can save.
December 3rd, 2015