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Old 01-29-2014, 01:40 PM   #41
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Actually this is another behavioral economics step. The first was auto signup for 401ks which it appears most companies that have 401ks now do (you have to opt out to avoid it). However if your employeer does not have a 401k there is no auto enrollment for those workers. Behavioral economics teaches that making things opt out instead of opt in causes greater participation because folks tend to not take actions.
So its only for those folks that are not proactive about their futures. (Which sort of excludes everyone on this site)
Studies have shown for example that if you are signed up when you start work you will likely not miss the amount taken out as much, just like if the contributions step up as you get raises.
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Old 01-29-2014, 01:53 PM   #42
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+1. CBS reported that in the 2013 SOTU last year Pres Obama offered up 41 programs he'd like Congress to act on, only 2 were adopted. This was the first SOTU in my entire adult life that I didn't even tune in, it's all just talk nowadays.
As I said above. It's being done by executive order. So it's not dependent on congress... and therefore not DOA.

Similar to when Bush Sr (41) offered to let folks have a little more cash in their paychecks each month, in a SOTU address. Since he wasn't changing tax code, just withholding, he could do it. Folks were unpleasantly surprised when tax time came around and they weren't getting refunds.

The POTUS has some powers. It's up to us to figure out how to mitigate or take advantage of changes implemented by executive order. In my case, in the example above, I increased my withholding and broke even tax time. (Most of my friends were scrambling to come up with money to pay their tax bills they hadn't counted on.) In this case - I'm looking at how I can turn it into a personal backdoor roth - since I have rolled IRAs precluding me from doing it the other way.
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Old 01-29-2014, 02:00 PM   #43
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Even though i'm a low income worker it doesn't look like i'll be eligible for this because it's only offered through your employer. I'm a independent contractor and therefore have no employer. So even though I only made $16K in 2013 and will likely remain below $25K/yr from now on, it doesn't look like i'm eligible.
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Old 01-29-2014, 02:05 PM   #44
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Even though i'm a low income worker it doesn't look like i'll be eligible for this because it's only offered through your employer. I'm a independent contractor and therefore have no employer. So even though I only made $16K in 2013 and will likely remain below $25K/yr from now on, it doesn't look like i'm eligible.
All hail to the centrally planned economy!
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Old 01-29-2014, 02:31 PM   #45
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Unlike conventional IRA accounts sold in many places, there isn't a minimum amount to open the account. The common $3,000 opening deposit can represent the income from multiple months of work for some full time workers. I've found a few accounts with lower minimums, with The Usual Suspects that have feesstrings attached.

The idea here is that a low income worker can still have access to a long term savings vehicle and get in the habit of setting aside a small percentage of their income for retirement. While a laudable goal, I don't see the local Burger Thing deciding to offer these to their staff.

(The local firm that runs many of our fast food outlets has been trying to make all employees 1099 contractors, while still controlling their hours. They're quite upset that the nassty old IRS won't let them do this. The owner keeps whining about this at every opportunity.)
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Old 01-29-2014, 04:01 PM   #46
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Recent article on no-fee/low min IRA's
401(k) Rollovers: How to roll over a 401(k) to a No Fee IRA | NerdWallet Investing

FWIW- IMHO myRA is nothing but a political stunt. I don't see how this program will suddenly cause large # of folks to suddenly begin saving. Most anyone (employed or not) can already open a Fed-insured savings acct at local bank or credit union for regular saving deposits then roll over to Roth when they get large enough balance. Access to TSP interest is simply too little to make much difference.
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Old 01-29-2014, 04:07 PM   #47
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Perhaps when details are released the topic can be revisited.
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