hr: Money

It’s nice to have a government that cares. Even one that might go a little overboard, when it comes to deciding how much money you need to put away into retirement.

Photo Credit: Irene2005

Election candidates are proposing to start a scheme whereby anyone earning belo$75,000 a year, will have 3% of their income socked away into an IRA automatically. Previously, options like these were optional, with employees choosing to opt in instead of opting out.

So if you’re an employee, it really comes down to a question of whether or not you’re willing to allow the government to take away 3% of your salary from you. Suppose you need that money for something else? The governmnet however, thinks that it has a social obligation to induce people to save more, and is therefore offering to contribute upto $1000 to match your own savings.

This actually sounds like a very sweet deal for the common man. The money that would be put away, would be invested in a low cost index linked fund. It could also help the economy by slightly de-freezing credit lines, since the extra money that is being saved, will go to helping firms that need the cash to grow.

So it ends up benefiting everyone. If pulled through, it would be the best thing that can happen to boost savings.