Trump, Clinton Agree on State-Run Auto IRAs

They may not have very much in common, but the two major party presidential candidates seem to be on the same page when it comes to state-run auto-IRA programs.

According to Politico, Diana Furchtgott-Roth, a volunteer adviser to Donald Trump’s campaign, affirmed Trump’s support for the state auto-IRA programs. “Mr. Trump believes that any states [that] want to set up their own auto-IRA programs have every right to do so,” Furchtgott-Roth said at a Politico event on political priorities for Baby Boomers.

Furchtgott-Roth said that Americans are not taking advantage of retirement programs because they do not make enough money to save, according to the report. She said that lowering the corporate tax rate would create more jobs and allow “people to have higher incomes so that they will have more for many things including saving for retirement.”

Neera Tanden, president of the Center for American Progress, also at the event, said that Hillary Clinton “has been a fan of the auto-IRA programs,” according to Politico.

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One Comment

  1. BenefitJack
    Posted October 16, 2016 at 9:46 pm | Permalink

    Obviously, Clinton, Trump, Diana Furchtgott-Roth, and Neera Tanden really have little understanding of retirement – if they think state Auto-IRA’s are a “political priority for Baby Boomers.” The youngest Baby Boomer was born in 1964, which makes her 52 years old this year – which means that starting in 2017, she only has 12 years to save prior to Medicare Eligibility. So, at the maximum of $6,500 a year (that would be quite a leap for those who haven’t saved anything for the first 30+ years of their working lives), you would accumulate maybe $100,000 (@6%). But, if you look at state auto-IRA programs, only 8 are in various stages of development, none is ready 1/1/17, and the default is maybe 3% of pay – so, someone at the median wage level in America (~$40,000), you are talking about $1,200 a year, and in 10 or so years, maybe you are going to accumulate $15,000?!

    So, obviously, if they are attending a conference focused on “Baby Boomer political solutions”, auto-IRA isn’t one of them. Makes me wonder who was there and what solutions were really under discussion.

    The retirement “crisis” in America is not the result of a lack of access, just like health reform’s “crisis” was not a lack of access. For those in “crisis”, those approaching retirement age with insufficient savings, the “crisis” most often was the result of a failure to prioritize. Wage earners who have retirement as a priority have had access to a fully functional, more than effective, tax preferred tool, every year since 1982 – the IRA. Median wage workers who were 25 years old in 1982, who saved the maximum in an IRA every year starting in 1982, and who earned an average return of 5% per year, who plan to work until Social Security Normal Retirement Age of 67, will generally have an adequate income in retirement from the combined programs of IRAs and Social Security.

    So, obviously, IRAs, even auto_IRAs as they are being constructed is not a Baby Boomer solution, nor will it be a solution for any “retirement crisis” for future generations, because the crisis is not one of access, but one of will or prioritization.

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