Skip to comments....President Obama Announces New Initiatives for Retirement Savings [WHITEHOUSE.GOV]
Posted on 09/05/2009 10:35:11 PM PDT by Cindy
Note: The following text is a quote:
THE BRIEFING ROOM
THE WHITE HOUSE
Office of the Press Secretary ___________________________________________________________________________ For Immediate Release September 5, 2009
WEEKLY ADDRESS: President Obama Announces New Initiatives for Retirement Savings
WASHINGTON In this weeks address, President Barack Obama will announce new steps to make it easier for American families to save for retirement. These new initiatives will complement the presidents major legislative proposals to boost participation in IRAs and match retirement savings.
The new initiatives will:
Expand opportunities for automatic enrollment in 401(k) and other retirement savings plans, Make it easier for more than 100 million families to save a portion or all of their tax refunds, Enable workers to convert their unused vacation or other similar leave into additional retirement savings, and Help workers and their employers better understand the available options for tax-favored retirement saving through clear, easy-to-understand language.
Together, these steps will expand the range of choices for workers who want to save and will make saving easier for millions of Americans.
Attached is a fact sheet that outlines the new initiatives for retirement savings. The fact sheet will be live on the website at 6AM tomorrow morning.
The full audio of the address is HERE. The video can be viewed online at www.whitehouse.gov.
Remarks of President Barack Obama Weekly Address Saturday, September 5, 2009
As we spend time with family and friends this Labor Day weekend, many of us will also be thinking about the state of working America. Yesterday, we received a report showing that job losses have slowed dramatically compared to just a few months ago. Earlier in the week, we learned that the manufacturing sector has posted its first gains in eighteen months, and that many of the banks that borrowed money at the height of the financial crisis are now returning it to taxpayers with interest.
These are only the most recent signs that the economy is turning around, though these signs are little comfort to those whove experienced the pain of losing a job in the previous month, or in the previous two years of this recession. Thats why it is so important that we remain focused on speeding our economic recovery. Throughout America today, tens of thousands of recovery projects are underway, repairing our nations roads, bridges, ports and waterways; renovating schools; and developing renewable energy. Were putting Americans back to work doing to the work America needs done and mostly in private sector jobs.
But even as we take aggressive steps to put people back to work, it is also important that we keep faith with men and women looking back on a lifetime of labor; hard-working Americans who deserve to know that their efforts have resulted in a secure future, including a secure retirement. For this recession has not only led to the loss of jobs, but also the loss of savings. The drop in home values, for example, has also meant a drop in the value of the largest single investment most families have. And the decline in the financial markets has led to a decline in the value of 401(k)s and other sources of savings and retirement security. As a result, over the past two years, the American people have lost about $2 trillion in retirement savings.
This carries a painful toll. Ive heard from so many whove had to put off retirement, or come out of retirement, to make ends meet. Ive heard from seniors who worked hard their whole lives but now, in their golden years, are unsure of where to turn to pay the bills, afford the prescriptions, or keep the home in which they raised a family. And having too little in savings not only leaves people financially ill-prepared for retirement, but also for whatever challenges life brings. It places in jeopardy so many dreams, from owning a home to attending college.
The fact is, even before this recession hit, the savings rate was essentially zero, while borrowing had risen and credit card debt had increased. Many were simply struggling to stay afloat as incomes were stagnant or falling and jobs were scarce; thats important to remember. But there were also those who spent beyond their means. And more broadly, tens of millions of families have been, for a variety of reasons, unable to put away enough money for a secure retirement. Half of Americas workforce doesnt have access to a retirement plan at work. And fewer than 10 percent of those without workplace retirement plans have one of their own.
We cannot continue on this course. And we certainly cannot go back to an economy based on inflated profits and maxed-out credit cards; the cycles of speculative booms and painful busts; a system that put the interests of the short-term ahead of the needs of long-term. We have to revive this economy and rebuild it stronger than before. And making sure that folks have the opportunity and incentive to save for a home or college, for retirement or a rainy day is essential to that effort. If you work hard and meet your responsibilities, this country is going to honor our collective responsibility to you: to ensure that you can save and secure your retirement. That is why we are announcing several common-sense changes that will help families put away money for the future.
First, were going to make it easier for small businesses to do what large businesses do: allow workers to automatically enroll in a 401(k) or an individual retirement account. We know that automatic enrollment has made a big difference in participation rates by making it simpler for workers to save and thats why were going to expand it to more people.
Second, well make it easier for people to save their federal tax refunds, which 100 million families receive. Today, if you have a retirement account, you can have your refund deposited directly into your account. With this change, well make it easier for those without retirement plans to save their refunds as well. Youll be able to check a box on your tax return to receive your refund as a savings bond.
Third, well make it possible for employees to put payments for unused vacation and sick days into their retirement plan if they wish. Right now, most workers dont have that option.
And fourth, the IRS and the Treasury Department are creating a plain-English, easy-to-follow guide, as well as a website, to help folks navigate what are often very complicated waters, especially for workers changing jobs who often are unsure how best to continue saving for retirement. Because the rules ought to be written to encourage people to save instead of discouraging them.
Well also build on these steps by working with Congress. As part of my budget, Ive proposed ensuring that nearly every American has access to a retirement savings account through his or her job. This plan would make it possible for workers to automatically enroll in IRAs through payroll contributions. And the budget simplifies and expands a tax credit for millions of families, matching half of a familys savings up to $1,000 per year and depositing the tax credit directly into a retirement account.
This is a difficult time for our country. But I am confident that we can meet the challenges we face and leave behind something better; that we are ready to take responsibility for our future once again as individuals and as a nation. I hope that all of you have the chance to enjoy this Labor Day weekend with family and friends. But my larger hope and expectation is that next Labor Day, the economic storms were weathering now will have given way to brighter and more prosperous times.
Note: The following text is a quote:
RETIREMENT SECURITY FOR AMERICAN FAMILIES
If you work hard your whole life, you ought to have every opportunity to retire with dignity and
financial security. And as a nation we ought to do all we can to ensure that folks have sensible,
affordable options to save for retirement.
— President Barack Obama
As many as 78 million working Americansabout half the workforcedon’t have a retirement
savings plan at work. Fewer than 10 percent of those without plans at work contribute to a plan
of their own. Our nation needs to do more to help families save and give them better choices to
reach a secure retirement.
Today, President Barack Obama and Secretary Tim Geithner announced new steps to make it
easier for American families to save for retirement. These new initiatives will complement the
presidents major legislative proposals to boost participation in IRAs and match retirement
savings. The Department of the Treasury will:
Expand opportunities for automatic enrollment in 401(k) and other retirement savings plans,
Make it easier for more than 100 million families to save a portion or all of their tax refunds,
Enable workers to convert their unused vacation or other similar leave into additional
retirement savings, and
Help workers and their employers better understand the available options for tax-favored
retirement saving through clear, easy-to-understand language.
Together, these steps will expand the range of choices for workers who want to save and will
make saving easier for millions of Americans.
NEW INITIATIVES TO HELP FAMILIES SAVE
(1) Expand Automatic Enrollment in 401(k) and Other Retirement Savings Plans: Under
automatic 401(k) plans, employers directly deposit a small percentage of each paycheck into
workers retirement accounts. Employees maintain full choice over whether and how much they
want to save. Each employee can choose to opt out of the plan or save a different amount, and
employers can easily match employee contributions. Automatic enrollment boosts participation
in 401(k) retirement plans from about 70 percent to more than 90 percent, and it is particularly
effective in increasing the participation of low-income and minority workers. But while nearly
half of larger companies with 401(k) plans have adopted automatic enrollment, fewer medium-
sized or small businesses have done so. The Administration will
Streamline the process for 401(k) plans to adopt automatic enrollment. Plan sponsors
typically seek Internal Revenue Service approval of plan amendments to ensure legal
compliance. By issuing pre-approved automatic enrollment language, the IRS will allow plan
sponsors to amend their plans to adopt automatic enrollment more quickly, without the need
for case-by-case approval by the IRS.
Make it easier to increase saving over time. A promising approach to boosting retirement
savings is to gradually increase automatic worker contributions over time. For example,
workers could dedicate a portion of their pay raises to retirement savings or be put on a path
to save a higher percentage of their pay every year, while remaining free to stop the increases
or opt out entirely at any time. Treasury and the IRS are releasing a ruling explaining how
401(k) plans can use this automatic increase feature.
Allow automatic enrollment in SIMPLE-IRAs. The SIMPLE-IRA combines the basic
elements of 401(k) plans and IRAs, creating an easily administrable retirement plan that
small businesses can offer to their employees. An estimated 3 to 4 million SIMPLE-IRA
accounts exist, but workers are not automatically enrolled. Treasury and IRS are now issuing
guidance to help interested employers automatically enroll employees in SIMPLE-IRA plans
so long as employees are free to opt out.
(2) Create Easier Ways to Save Tax Refunds: More than 100 million families receive federal
income tax refunds each year. Averaging more than $2,000, tax refunds present a unique
opportunity for families to save. Taxpayers can already instruct the IRS to directly deposit their
refunds and dedicate a portion to an IRA or other savings vehicle. Today, the Treasury and IRS
announced that taxpayers will have another savings option beginning in early 2010 — the ability
to use their refunds to purchase U.S. savings bonds simply by checking a box on their tax return,
without having to open an account at Treasury or take any other action, and even if the taxpayer
doesn’t have a bank account. The savings bonds would be mailed to the taxpayer. Taxpayers will
be able to purchase bonds in their own names beginning in 2010 and to add co-owners such as
children or grandchildren beginning in 2011.
(3) Allow Unused Leave to Be Converted to 401(k) Savings: Every year, millions of workers
leave their jobs and receive substantial payments, often in cash, for unused vacation or other
similar leave. For many employees, this money could easily be saved. Treasury and the IRS are
issuing two rulings today describing how employers can allow their employees to contribute
those amounts to their 401(k) plan. As an alternative, the rulings also give employers the option
of making their own contribution of these amounts to their employees 401(k) or other plan.
(4) Explain Saving Options: Employees changing jobs and receiving payments from a
retirement plan face a number of choices, including a tax-free rollover of their benefits to
another retirement account. These choices are not always well understood. Today, Treasury and
the IRS are issuing a plain-English road map for rollovers to help workers keep their savings in
tax-favored retirement plans or IRAs until they are ready to retire, rather than withdrawing cash
earlier, subject to tax penalties. The road map is an updated model notice for plans to give
departing employees. It clearly explains how to roll over plan balances, the key decisions, and
the tax consequences. In addition, the IRS has created new user-friendly web site materials to
help employers select an appropriate retirement plan and to help employees better understand the
benefits of saving for retirement.
To read the Treasury and IRS rulings and materials, please visit http://www.irs.gov/retirement.
BUILDING ON EXISTING OBAMA RETIREMENT PROPOSALS
The Obama Administration is committed to giving tens of millions more Americans more and
better choices to save for retirement through their jobs and receive tax benefits for doing so. The
president will continue to work to expand and strengthen employment-based retirement security.
Todays steps complement two important initiatives included in President Obamas budget:
Create Automatic IRAs: IRAs are intended to give a tax-favored saving opportunity to the
millions of workers — about half the American work force — who have no workplace
retirement plan. Yet fewer than 1 out of 10 workers who are eligible to make tax-favored
contributions to an IRA actually contribute to an IRA, while 9 out of 10 workers
automatically enrolled in a 401(k) plan continue to make contributions. When enacted by
Congress, the Administration’s proposal will automatically enroll workers without workplace
retirement plans in IRAs through payroll deposit contributions at the workplace. The
contributions will be voluntary — employees will be free to opt out — and matched by the
Savers Tax Credit for eligible families.
Reform and Expand the Savers Credit to Match Retirement Savings: The expanded
Savers Tax Credit will match the retirement savings of millions of families. It will match half
of families’ savings up to $500 per individual each year and deposit the tax credits directly
into the individual’s 401(k) plan account or IRA. The credit will be available to low- and
middle-income working families, including those who earn too little to owe income taxes.
Are the 10+ % that aren't working gonna find this makes it easier than ever to contribute to thier 401k's?
Oh, and, retirement is scheduled to require much less savings, isn't it, owing to it's mandadory shortening under Universal Healthcare>
Dude is smokin' weed again, I tell you!
I wonder how this will dovetail into the dems plans from march to put everyone’s 401k holdings into the general fund... Originally slated for October.
ON THE INTERNET:
Well I’m curious just what he wants me to save, barely make the bills now, didn’t get a raise the last two years...
Here are the GDP Growth Rates by Quarter for the last few years:
A Recession is defined as two consecutive quarters of negative growth. So, this one started in Q3 of 2008. We are now in Q3 of 2009.
The Recession is ONE YEAR OLD YOU LYING SACK OF SH*T!
Guess we have yet another thing to shut down.
Van Jones... CHECK
The rest of the czars
I’m sure I’ve missed a few.
Until the punitive view of small busines changes, screw you Mr. President.
I have no incentive to invest or work as long as the govt tells me they are capping my deductions and making it impossible to make good money for taking a risk. I would rather sit on my butt, have a cigar and cocktail, and tell potential workers no when they asked to be hired.
I am under pressure to deliver particular software but it will cost me my deductions to make more money. Welcome to disincentive time. I will sit back and watch the flowers grow: that helps no one.
If we hadn’t been forced to fork over half of our income, we wouldn’t be broke when we retire! Obama is taking what little is left of our hard earned money and spending it like a kid in a candy store!
A bit Off [Thread] Topic
“Other People’s Money”
By INVESTOR’S BUSINESS DAILY | Posted Friday, September 04, 2009 4:20 PM PT
SNIPPET: “Economy: The jobless rate has hit a 26-year high. More than 200,000 jobs were lost last month. Yet the White House continues to claim its stimulus legislation is working. When does the charade end?”
AHA! Now we know the real reason for this gambit:
"Invest your tax refund in GOVERNMENT DEBT SO I CAN SPEND SOME MORE!!! - 0BUMMER
Hey O! Instead of more gubmint crap, how about you lower taxes so I can keep my own money?
Well, that would apply to the tax refund. I'm wondering if the proposed 401(k) will be a government-managed fund, or any "qualified plan" run by your choice of private companies such as Fidelity Investments. Wanna bet this is another "public option" to unfairly compete with private enterprise?
Why in the hell would that do that when they can roll out another attempt at social engineering under the guise of freedom and 45% of Americans believe it?
POTUS muzzie Hussein and his comrades can keep their skinny communist fingers out of my pockets and I’ll be just fine.
This is the same scheme as his:
1) Two trillion dollar deficit reduction plan that assumed Iraq war would continue at the same rate of spend for the next decade
2) Two trillion savings from health care because all parties (hospitals, pharmas and others) agreed to cuts
3) Saving the planet plan that magically makes auto makers meet the ridiculous and impossible 36 mpg CAFE standards by 2013
4) His plan that would keep unemployment from exceeding 8%
Etc. etc. etc.!!
What 'tax refunds'?!!!
YES HE IS! Obama lies about everything including health care!
He has never had anyone challenge him on his statements until now! And it certainly isn't the media challenging him (as they should have years ago) it's the American citizens which makes it even more important to keep up the heat on him!