J. David Ake, Associated Press
Marine One carrying President Donald Trump away from the White House to start his summer vacation, passes the U.S. Flags around the Washington Monument on a hot summer day in Washington, Friday, Aug. 4, 2017.
Most Americans are not saving enough for retirement.
A survey conducted by Time last year reported that one in three Americans has saved nothing for retirement, and that 56 percent have saved $10,000 or less.
But starting now, one state is doing something about it — against stiff opposition from industry groups representing finanical companies that provide investment services.
In July, Oregon launched a new automatic Independent Retirement Account program to make both the power of automatic savings and the tax benefits of IRAs easily available to workers who currently don’t have an IRA.
Under the program, money is automatically deducted from a person’s paycheck and deposited in an employer-based IRA. Employers will often match a portion of that contribution up to a set limit. Individuals can also set up IRAs on their own. Either way, the money is placed in diversified investment portfolios that limit excessive risk, and any taxes on earnings are deferred until after retirement, when most people enjoy have a lower rate.
Without an employer IRA, many people find the process of setting one up and making contributions daunting.
The Oregon law will eventually require most employers to either offer an IRA deduction program or offer to sign employees up for an automatic IRA deduction program operated by the state.
The program was launched with 10 pilot employers and is scheduled to gradually phase in until all employers are required to participate 2020, Investment News reports. Other states that are phasing in automatic IRAs include Illinois, California, Connecticut and Maryland.
The Oregon program will eventually be mandatory for employers, but their involvement will be limited and automated, restricted to linking paychecks to Roth IRA accounts, which offer signficant federal tax and retirement…