Auto-IRAs: 1 of 3 Retirement Security Options
Depending on which lawmaker you speak with, so-called auto-IRA plans are one of the most talked about ideas to pursue for retirement security in Pennsylvania.
Auto-IRAs allow workers to make contributions to their own retirement plans through automatic payroll deductions. And, auto-IRAs, usually, but not necessarily always, enroll every eligible working woman and man – except if they choose to opt out.
One slightly negative aspect of auto-IRAs is they don’t allow employers to make any matching contributions to employees’ savings.
If Pennsylvania establishes an auto-IRA-type retirement investment program, a state administrator will be responsible for selecting one or more private money managers and a menu of investment strategies … and, then, individuals can select the plan that’s right for them.
Having the state oversee these programs ensures low investment and administrative fees through economies of scale, which means Pennsylvanians choosing to prepare for a more golden retirement will enjoy the biggest bang for their invested bucks.
These plans are easy to set up and portable in the event you switch jobs.
Several states have set up or are in the process of setting up auto-IRA programs, including California, Illinois, and Maryland. Oregon recently celebrated its one-year anniversary of its program and already has several million dollars of assets invested on behalf of workers throughout the state.
Is the auto-IRA the retirement savings proposal you’d like the legislature to approve? Call your lawmakers and get them to act now.