Starting next year, the federal government will match up to $1,000 in contributions annually in new public retirement accounts available to all American workers…
“We have millions and millions of people, ‘cause the stock market has done so well, hitting all those records, your 401ks are way up – yet half of all working Americans still do not have access to a retirement plan with matching contributions from an employer,” the president said.
DB2
Buying the voters off is a time honored political stunt. Where’s my tariff refund check he promised?
After another few nice shot glasses of “free” fun rum from dumdum, we ought expect a long long hangover of dollar collapse and/or perhaps higher taxes on everything everywhere everyhow.
Or will zillions of fairies descend from heaven, pay off the debt, and then serve up mountains of hambergers…..?
There have been many threads here on METAR about the low retirement savings of many Americans. A quick search indicates that the median for retirement accounts is about $40K, woefully inadequate. Increasing that for those who don’t have employer matching is definitely a positive, IMO.
DB2
Quite a bit higher than that, actually.
Isn’t this socialism though? Giving my tax dollars to the poor? Just asking…
I don’t think ‘average’ is what we should be looking at; but rather median!
JimA
True.
Here are the average and median retirement savings by age, according to the Federal Reserve:
| Age range | Average retirement savings | Median retirement savings |
|---|---|---|
| Under 35 | $49,130 | $18,880 |
| 35-44 | $141,520 | $45,000 |
| 45-54 | $313,220 | $115,000 |
| 55-64 | $537,560 | $185,000 |
| 65-74 | $609,230 | $200,000 |
| 75 and older | $462,410 | $130,000 |
| Source: Federal Reserve Survey of Consumer Finances |
Don’t forget there is a salary cap on the fed match. $35k for singles and $70k for married couples as I recall. Not a bad incentive for those who struggle to make ends meet. We will be watching to see how much difference it makes.
Thank you. Seems to show a much more depressing entry in to old age!
JimA
Cold, reportedly …
One suspects that median and average might be quite different numbers
Oh look, they are!
It seems to me that if broke Uncle Sammi is going to add money to 401(k) accounts to help those that “don’t match”, then those companies who “do match” will be incentivized to stop matching, meaning they can keep more and offer workers less.
So: wealth transfer from me to corporations, and giving corporations another “tax cut” that isn’t called a tax cut.
Very clever. Not really in line with “conservative principles”, but conservatives seem fine with it. Hard to tell which way is up anymore, even with a scorecard.
Some, although with the salary cap of $35K many workers (half?) wouldn’t be eligible so company matching would still be called for.
DB2
Uncle Sammi might be clever enough to require employers to continue their match for their employees to qualify. The amounts involved are tiny. Those earning $20k would do well to contribute $1k toward retirement. Very unlikely to max IRA or 401k limits.
