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Nickelless
Administrator
USA
5580 Posts |
 Posted - 09/05/2009 : 14:44:04
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Obama promotes saving as recession hits nest eggs
By CHARLES BABINGTON
Associated Press Writer
Updated: September 05, 2009, 8:05 PM / 0 comments
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AUDIO: In his weekly radio and internet address, President Barack Obama says America can no longer afford to put off retirement savings.
AUDIO: In his weekly radio and internet address, President Barack Obama says a change will allow workers to bank cash for being healthy and staying on the job.
AUDIO: In his weekly radio and internet address, President Barack Obama says his administration will make it easier for small businesses to allow workers to automatically enroll in 401(k) or individiual retirement accounts.
AUDIO: President Barack Obama is announcing new steps aimed at making it easier for Americans to save for retirement. AP correspondent Mike Gracia reports.
AUDIO: In his weekly radio and internet address, President Barack Obama says the financial downturn has been especially hard on retirees.
Treasury and IRS information on retirement savings
Obama address
VIDEO: Obama expands workers' retirement savings options
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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," 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," 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," 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," 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.
Text added by Ardent Listener.
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Country
1000+ Penny Miser Member
USA
3121 Posts |
Posted - 09/05/2009 : 15:44:44
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Savings bonds used to be somewhat of a good deal for savers. The last ones I bought in 1993 gave you 6% guaranteed interest for the first 12 years, then 4% guaranteed interest for the remaining 18 years. The savings bonds you buy today give you a market variable interest rate, which should be pretty close to 1%.
However, with the depreciation of the dollar over the years the real value of savings bonds has depreciated along with the falling dollar.
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Nickelless
Administrator
USA
5580 Posts |
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Ardent Listener
Administrator
USA
4841 Posts |
Posted - 09/05/2009 : 19:38:57
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How about allowing workers to check a box on their income tax forms so their tax refunds would be paid in copper pennies and/or 25/75% nickels? Of course one would have to first have an income much less a refund. 
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Think positive. |
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Bluegill
1000+ Penny Miser Member
USA
1964 Posts |
Posted - 09/05/2009 : 19:55:46
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quote:
Originally posted by Country
Savings bonds used to be somewhat of a good deal for savers. The last ones I bought in 1993 gave you 6% guaranteed interest for the first 12 years, then 4% guaranteed interest for the remaining 18 years. The savings bonds you buy today give you a market variable interest rate, which should be pretty close to 1%.
However, with the depreciation of the dollar over the years the real value of savings bonds has depreciated along with the falling dollar.
I don't think the earned interest even kept up with the inflation. 
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fb101
Administrator
USA
2856 Posts |
Posted - 09/05/2009 : 20:57:59
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Here's a hint about the bonds. Someone has to suck up the U.S. debt since it's obvious that China and other won't be buying for too much longer.
Yes, I'm well aware that we can't finance all that ourselves.
Also, saving for retirement is a great idea. with any luck you won't need an operation which you won't be allowed to have or some such and wind up kicking off early. |
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n/a
deleted
7 Posts |
Posted - 09/06/2009 : 14:19:35
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Interesting the our current speaker of the house is proposing a "wind fall tax" on our retirements. Only a socialist could describe an extra tax on retirement as "windfall tax"So I guess obama's encouragement to save for our retirement is just a ploy to get more money in the government coffers.
Vote for freedom and only for politicians who will support less government intrusion into our lives. Freedom is always the best answer. Best to all, Mike. |
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pencilvanian
1000+ Penny Miser Member
USA
2209 Posts |
Posted - 09/06/2009 : 15:27:47
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Some thoughts on this-
--Allowing such plans(401K plans) to automatically increase the amount that workers save over time.
Where will the money be invested in? The company stock (like Enron) or Federal Government Securities (and we all know how sound those things are) or a mutural fund (and hope the stock/bond market never goes down.)
-Allowing people to check a box on their federal tax returns asking that any refund be sent as a savings bond.
A tax refund means you overpaid the government so you would not have to pay the IRS on April 15th, you prefer to get money back from the government than pay the government. A tax refund is an interest free (but not expense free) loan to the US, it is your money and it should be viewed as your money to spend it as you wish, not ask you to convert it into a bond.
I think there is some expense in the US sending you a refund check, the cost of printing and mailing it.
As far as 401K plans go, the president "gives" (and I use the word gives very, very loosely)
and the IRS takes-
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In 2010 IRS could cut 401(k) contribution limit to $16,000
Low inflation
has made food and gas more affordable
during the recession, but there's a downside: Social Security beneficiaries probably won't get a raise next year, and the IRS may reduce the amount workers can contribute to their 401(k) plans.
.....Unless inflation picks up in August and September, the IRS could be forced to reduce the cutoff to $16,000 in 2010, according to an analysis by Mercer, a human resources consultant. The threshold for catch-up contributions could be reduced to $5,000. This would mark the first time the IRS has reduced 401(k) contribution limits.
(Unless inflation picks up? You mean there isn't inflation now, and inflation is a good thing for consumers?)
......By law, Social Security benefits can't decline. But because premiums for the Medicare drug program are expected to increase next year by 11%, seniors who have them deducted from their benefits will see a drop in payments, says Barbara Kennelly, president of the National Committee to Preserve Social Security and Medicare.
(If there is low inflation why are premiums going up for drug coverage? Are drugs not/no longer/never were used to measure inflation? Must be nice to measure inflation with a yardstick that stretches like a rubber band.) |
Edited by - pencilvanian on 09/06/2009 15:32:45 |
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Nickelless
Administrator
USA
5580 Posts |
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Ponce
Penny Hoarding Member
Cuba
630 Posts |
Posted - 09/10/2009 : 17:58:26
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| At other blog sites I am sorry to see that so many member are selling their silver and gold... not because the price has gone up some but because they need the cash... I can only hope that they were able to make a small profit. |
"If you don't hold it, you don't own it"...Ponce |
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Recession hits nest eggs; US promotes ways to save
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