Obama Says Save as Nest Eggs Take Hit

(AP)  The recession has eaten into people's nest eggs so the government is promoting ways to make it easier to save for retirement.

One initiative that President Barack Obama outlined in his weekly radio and Internet address Saturday will allow people to have their federal tax refunds sent as savings bonds. Others are meant to require workers to take action to stay out of an employer-run savings program rather than having to take action to join it.

"We know that automatic enrollment has made a big difference in participation rates by making it simpler for workers to save," Mr. Obama said. "That's why we're going to expand it to more people."

The new federal steps, which do not require congressional action, include:

Making it easier for small companies to set up 401(k) retirement savings plans in which all workers are automatically enrolled unless they ask to be omitted. Employers can set default amounts of each worker's pay - perhaps 3 percent - to automatically be deposited into the accounts without being taxed. Workers can raise or lower the contribution levels, and they choose how to invest the money. They will pay taxes on the money only when they withdraw it as retirees, when their tax rates are likely to be lower than when they are working full-time. A similar process would apply to savings plans called SIMPLE-IRAs.

Allowing such plans to automatically increase the amount that workers save over time unless the workers object.

Allowing people to check a box on their federal tax returns asking that any refund be sent as a savings bond. More than 100 million U.S. households receive refund checks each year, and many are promptly cashed and spent.

Allowing workers, when leaving a job, to direct unused vacation pay to a retirement savings account rather than taking it in cash.

"This recession has not only led to the loss of jobs, but also the loss of savings," Mr. Obama said, citing declines in home values as well as sources of retirement income.

"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 commonsense changes that will help families put away money for the future," President Obama said.

The administration earlier asked Congress to make it easier to set up retirement accounts for people whose workplaces do not offer them. No legislation has moved thus far.

"Tens of millions of families have been, for a variety of reasons, unable to put away enough money for a secure retirement," President Obama said. "Half of America's work force doesn't have access to a retirement plan at work. And fewer than 10 percent of those without workplace retirement plans have one of their own."

Nearly half of the U.S. work force has little or nothing beyond Social Security benefits to get by on in old age, Treasury Secretary Timothy Geithner said.

"Just as the administration is dedicated to reviving the economy and getting people back to work, so too it is dedicated to helping put retirement security within the reach of all Americans," Geithner said in a statement.

While saving for retirement is universally seen as a good idea, any increase in savings rates could somewhat slow the nation's rebound from the economic recession.


For more info:
Treasury and IRS Information on Retirement Savings
By Associated Press Writer Charles Babington

[bailoutben]

If Obama is truly interested in encouraging Americans to save, he might consider urging his Federal Reserve chairman to knock it off with the artificially low interest rates.

[reality42]

The Table has turned Canadians are Investors and Americans are SAVERS

[s0055d-2009]

I just don't understand how he could support Bernanke who dropped interest rates too low with the excuse it is helping the economy. Didn't low interest rates (teaser A.R.M's) cause this crash, to begin with? Now he's telling people to save? What is the matter? Are government securities getting less attractive to foreign investors?
Is this the reason for the push to save?

[oiaf0831]

Bingo.

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How dare you make such a racist comment! Shame on you.

[oiaf0831]

Yes, Obama is on a big drive to encourage more people to buy Savings Bonds.

He has to finance his staggering trillion dollar stimulus giveaway somehow, he needs to sell as many bonds as possible.

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Don't forget to wash those sheets before your KKK meeting. You just can't stand to see your white power slipping away.

[pensacola8-2009]

My 401K lost 40% of its value in 2007. If we did get a health care bill passed, I could retire without requiring my 401K to recover it's value before reaching 59-1/2.

It is clear that Republicans don't want to advocate for people like myself. I work and save. When the chips fall, the Republicans want to serve the lobbyists and let hard working people like myself eat dirt and die.

The Republican derregulation theme of making government so small that you could drown it in a bath tub doesn't land well with me. Fiscal policy can't giving so much control to capitalists to make profit and police their selves. It happened in 1929 and again in 2007.

Thank God for President Obama and Vice President Biden. Only those two really get it and are in touch with middle class America!!

[oiaf0831]

Oh, super duper.

When our national average savings rate is negative, Obama's solution is to encourage people to save money.

And in other news, Obama urges unemployed persons to get a job...

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You just can't stand it that we have a black president. Deal with it, racist bigot!

[hungry1968-16]

"President Obama says to save your money, and do what you can to save up for your retirement!! What an evil, communist, socialist plan that is!!"

[clancy49]

I forgot, the other way of saving is the Folger can, but remember due to inflation that our government says is not happening, the dollars and change you save are actually decreasing in value. We are economic slaves already. Perhaps Mr. President we should just skip the slide into socialism and go directly to communism. Up to being Stalin?

[nextgenman09]

I agree, since Obama says to save, you should react out of RINO paranoia and give me all your money. Check with Glenn Beck first to see if these are your proper instructions though.

[clancy49]

Save? SAVE? The income of Americans has declined in the past two decades by 15%. Prices have risen astronomically in those same two decades. In the current age of greed and corruption our spendable income has decreased into the negative. Cutting back to bare bones allowing any savings have gone to banks where the charges on savings accounts eat the savings beyond the paltry interest they receive. The next place is the stock market. There legal government thieves regularly steal it in crashes. Social Security that some have paid into for over 50 years is paid back in starvation amounts and reduced by medical insurance and high priced maintainence medicines. Taxes are raised so high by Federal, State, County, City, and Property there are no returns to put into bonds, only to feed and shelter for a month if lucky. The tax breaks are given only to the wealthy. Do you think they'll put it bonds? They already own the government. The stupidity in DC both Executive and Legislative is mind boggling. I am reminded of the American Revolution, the French Revolution, and the Bolshevik Revolution when the ruling classes are so insane and removed from the laborers the collapse is imminent. So I say to the Legislative and Executive Branch, 'Get your heads out of your arses. What the Bloody ---- are you thinking.'

[jeff-fla]

by SouthernForever September 5, 2009 9:15 PM EDT
NO, I supported the war in Iraq, I consider it well spent. It's too bad Obama has even bungled that and the insurgents are returning because they know he won't harm a hair on their head.


Money well spent? One of the reasons his dad left Iraq the way it was after the invasion? To keep control. He knew that was the way of life there, it will always be the way of life there. The moment the troops are out of there it will return to its former self. You can't change there minds and way of life with occupation. All of the Arab countries live the same way they used to live.