It is the present reality that 55 million Americans who work for a living are incapable to save money for their impending retirement. Their salary is adequate for this. The paucity of employer sponsored opportunities in savings has direct impact on American workers' security. Social Security is simply a base for the retirement income- and not full house. The workers who did not save adequate amounts of money carried the risk of becoming fully dependent on programs relating to social safety nets. However, a study conducted by the AARP revealed that these workers enjoy a 15 times chance more to save in case they enjoy access to a plan of payroll deduction savings.
Solving the deficit problem
There is no need for the Congress to stop any bipartisan state solution when it comes to solving the deficit in retirement savings. It is to be noted that the Senate has taken into consideration the two resolutions for which the house has already provided its approval. In case these two resolutions get passed, the United States may not save money. It will also cancel the attempt of the Labor Department to permit states to serve virtually as innovation laboratories. In short, it will be against all American ethics.
Dependence on market forces
The Work and Save plans have a market centric approach. A person's losses or gains cannot be blamed on the employer or the state. If they want, employees could opt out in case they are loath to contribute. It is possible for them to select how much they wish to save. They can also decide the amount of money to invest in. Such retirement savings plans are much less dependent on the safety nets of the government. The fact of the matter is that in case the states will take the requisite action, taxpayers could save a massive $4.8 billion over subsequent 10 years. The sole involvement of small business owners is to provide information to employees.
Work and then Save plans function like 529 college savings schemes. It is found that Americans, in a space of 20 years, have used such plans to ferret about $253.2 billion calculated in pretax dollars.
More creative solutions are expected from the state as they are much closer to the workers. The removal of regulatory barriers hampering retirement savings vehicles by small businesses are being considered by a number of states, like Arkansas, Utah, New York, California and Connecticut.