Comments on: Automatic IRAs: The Key to Getting Low Earners to Save for Retirement? http://genxfinance.com/2007/02/27/automatic-iras-the-key-to-getting-low-earners-to-save-for-retirement/ Helping a unique generation achieve financial independence. Fri, 20 Nov 2009 23:09:41 -0800 http://wordpress.org/?v=2.8.4 hourly 1 By: links for 2007-03-05 http://genxfinance.com/2007/02/27/automatic-iras-the-key-to-getting-low-earners-to-save-for-retirement/#comment-1483 links for 2007-03-05 Mon, 05 Mar 2007 21:25:11 +0000 http://genxfinance.com/2007/02/27/automatic-iras-the-key-to-getting-low-earners-to-save-for-retirement/#comment-1483 [...] Automatic IRAs: The Key to Getting Low Earners to Save for Retirement? There has been increasing discussion lately about new ways to help lower income employees who may not have access to more traditional retirement savings to begin saving for retirement. (tags: finance iras retirement) [...] [...] Automatic IRAs: The Key to Getting Low Earners to Save for Retirement? There has been increasing discussion lately about new ways to help lower income employees who may not have access to more traditional retirement savings to begin saving for retirement. (tags: finance iras retirement) [...]

]]> By: uibristol http://genxfinance.com/2007/02/27/automatic-iras-the-key-to-getting-low-earners-to-save-for-retirement/#comment-1392 uibristol Wed, 28 Feb 2007 03:38:46 +0000 http://genxfinance.com/2007/02/27/automatic-iras-the-key-to-getting-low-earners-to-save-for-retirement/#comment-1392 I'm not going to argue here, just point you to an article published in 2005 in The Elder Law Journal from the University of Illinois College of Law from James Poterba at MIT. It focuses on 401(k) plans rather than IRAs, but it is an easy read and on topic. The link below only shows the first five pages, but it is available on Westlaw or at your local law library. http://home.law.uiuc.edu/elderlaw/issues/vol_13/num_1/pdfs/Poterba.web.pdf I’m not going to argue here, just point you to an article published in 2005 in The Elder Law Journal from the University of Illinois College of Law from James Poterba at MIT. It focuses on 401(k) plans rather than IRAs, but it is an easy read and on topic.

The link below only shows the first five pages, but it is available on Westlaw or at your local law library.
http://home.law.uiuc.edu/elderlaw/issues/vol_13/num_1/pdfs/Poterba.web.pdf

]]> By: Jeremy http://genxfinance.com/2007/02/27/automatic-iras-the-key-to-getting-low-earners-to-save-for-retirement/#comment-1382 Jeremy Tue, 27 Feb 2007 17:13:47 +0000 http://genxfinance.com/2007/02/27/automatic-iras-the-key-to-getting-low-earners-to-save-for-retirement/#comment-1382 Lazy man, her argument against the credit was that the people who qualify generally don't owe taxes and she calls it "consumer fraud" since they can't take full advantage of the benefit. While this may be true, it brings me back to the question as to what the proposed solution would be. You already get to deduct your contributions to a Traditional IRA, so if you max it out that is $4,000. On top of that if you qualify for the saver's credit you get to take a credit of up to half, or $2,000. If this happens to someone who doesn't owe any taxes or very little taxes what more can you do? The government isn't in the business of paying people to be responsible by saving for retirement. They make it advantageous to do so but there is a point where you just can't help some people any further. It would be interesting to see the numbers of the people who actually qualify for this credit and take full advantage of it by contributing the max to their IRAs. I would venture a guess that the number is extremely small. She is quick to point out the flaws but offers no real solution. I don't know if there is an easy solution to this problem to be honest. In all fairness, she admits that the automatic IRA is not an idea solution for some of the reasons I mentioned above, but she constantly drives home the fact that only the well-off people benefit from any sort of retirement savings. Lazy man, her argument against the credit was that the people who qualify generally don’t owe taxes and she calls it “consumer fraud” since they can’t take full advantage of the benefit.

While this may be true, it brings me back to the question as to what the proposed solution would be. You already get to deduct your contributions to a Traditional IRA, so if you max it out that is $4,000. On top of that if you qualify for the saver’s credit you get to take a credit of up to half, or $2,000. If this happens to someone who doesn’t owe any taxes or very little taxes what more can you do?

The government isn’t in the business of paying people to be responsible by saving for retirement. They make it advantageous to do so but there is a point where you just can’t help some people any further.

It would be interesting to see the numbers of the people who actually qualify for this credit and take full advantage of it by contributing the max to their IRAs. I would venture a guess that the number is extremely small.

She is quick to point out the flaws but offers no real solution. I don’t know if there is an easy solution to this problem to be honest.

In all fairness, she admits that the automatic IRA is not an idea solution for some of the reasons I mentioned above, but she constantly drives home the fact that only the well-off people benefit from any sort of retirement savings.

]]> By: Lazy Man and Money http://genxfinance.com/2007/02/27/automatic-iras-the-key-to-getting-low-earners-to-save-for-retirement/#comment-1381 Lazy Man and Money Tue, 27 Feb 2007 17:00:00 +0000 http://genxfinance.com/2007/02/27/automatic-iras-the-key-to-getting-low-earners-to-save-for-retirement/#comment-1381 Towards the Jane Bryant Quinn quote, it would seem to me that Saver's Credit could be fairly sizable percentage of some of the income of those in the lower class. Why not just increase that if the goal is to give the lower class more incentive to save? The infrastructure is already in place. Towards the Jane Bryant Quinn quote, it would seem to me that Saver’s Credit could be fairly sizable percentage of some of the income of those in the lower class. Why not just increase that if the goal is to give the lower class more incentive to save? The infrastructure is already in place.

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