President Obama reaffirmed his commitment to improve the financial security of American households in Tuesday’s State of the Union address with his call to create a new way for Americans to build their own retirement savings. Through executive action, the president will create a simple, safe, and affordable “starter” retirement savings account available through employers to help millions of Americans save for retirement. This savings account would be offered through a familiar Roth IRA account and, like savings bonds, would be backed by the US government.
The president’s call for a new way for working Americans to start their own retirement savings builds on work that the Initiative on Financial Security at the Aspen Institute has led since 2004, with a bipartisan group of financial leaders, policy leaders, advocates, and experts. Aspen IFS has called for expanded and simplified Individual Retirement Accounts built with savings matches, simplified investment matches, and features that make saving at work automatic.
The president’s call for tax code changes — which would help middle-class Americans build their nest-eggs and make saving at work automatic for millions of workers who now fall outside of the workplace savings system — are changes that have been vetted at Aspen IFS dialogues for more than 10 years. Aspen IFS focuses on smart solutions to the challenge of building savings for low- and middle-income Americans so that they can afford their dreams of homeownership, college, and a successful retirement.
For decades, millions of working Americans have been left out of the savings system that serves as an onramp to the dream of economic opportunity. Few economic opportunities are possible without the savings and economic system that converts a job to a dream. It is heartening to see the president and the country’s leaders take seriously the need to improve the savings system that will ultimately drive household financial security in the US.
Watch past Aspen Institute dialogues on strengthening retirement security for American workers below: