There’s Still Time to Save Your Retirement
There’s Still Time to Save Your Retirement by
Goodbye, myRA! We hardly knew you.
Of course, that could have been part of the problem. Too few people knew what it was or trusted it, so they refused to give it a try.
In 2015, President Barack Obama rolled out myRA, which offered Americans without access to a 401(k) or similar retirement savings account a way to have funds automatically deducted from their paycheck and rolled into an individual retirement account.
At the end of July this year, the Treasury Department announced that it was eliminating myRA due to its high cost of operation and lack of interest. Since the launch of the service, only 30,000 people participated, contributing $34 million.
But while myRA was less than perfect, it does bring up a key problem across America…
The Problem for Every Generation
Americans are horrible savers. I’ll admit that it’s something that I’m not great about at times. For many Americans, it’s hard to put money away for something that’s 20, 30, even 40 years down the road when they are struggling to pay rent or other bills.
Franklin Templeton Investments reports that 40% of millennials have no retirement strategy in place. This is the same generation that is struggling under the weight of school loans, a weak job market and slow wage growth.
But it’s not just millennials who are unprepared for retirement. The Insured Retirement Institute reports that 54% of baby boomers have no retirement savings, and 82% of baby boomers have underestimated the percentage of their income they will need to pay for health care during retirement.
Don’t forget to add in that there is a growing pension problem that could leave many people running far shorter than they expected when it comes time to retire.
This retirement shortfall is forcing many states to help fill the gap that the federal government can’t.
Filling the Gap
The U.S. Census Bureau reveals that only 14% of U.S. employers offer a 401(k) or similar savings program. That leaves far too many Americans without an easy way to save money for their retirement.