States have initiated auto-I.R.A. programs to provide private-sector employees access to retirement saving plans, addressing the decline of traditional pensions and low personal savings rates.
The implementation of auto-I.R.A.s reduces barriers to retirement saving, automatically enrolling workers and deducting a portion of their income to facilitate contributions, with an initial rate of 3-5%.
With over 930,000 accounts and $1.7 billion saved in state-run plans, auto-I.R.A.s are showing early success in helping employees save for retirement.
Many workers do not establish personal I.R.A.s due to inertia or fear of investment choices, highlighting the potential effectiveness of automatic enrollment in savings plans.
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