The Automatic IRA: A Conservative Way to Build Retirement Security

David C. John /

With the introduction of new legislation to implement the Automatic IRA—a simple, low-cost retirement savings vehicle for employees of small businesses—the effort to enable many more Americans to use a payroll deduction to build retirement security moves to a more active phase. A new bill by Senator Jeff Bingaman (D–NM) and a somewhat different version by Congressman Richard Neal (D–MA) retain the basic features of the original version, but they also include major improvements over past efforts.

The Automatic IRA is a conservative, market-oriented solution to help address our retirement savings crisis. It would increase the proportion of Americans who can save for retirement at work from 50 percent to 90 percent, make it simple for small business owners to offer IRAs to their employees, and create low-cost accounts that an employee can understand and use without having to be a financial expert. (more…)