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Surrounded by Congressmen, US President George W. Bush signs the Pension Protection Act of 2006, 17 August, 2006 in Washington, DC.
Five years after the federal government altered the retirement savings landscape, are workers better prepared for retirement? Critics of the retirement and 401 (k) plan reform say no. A controversial provision in the 2006 Pension Protection Act sought to use employees’ inertia to their advantage and “auto-enroll” them in 401 (k) retirement plans to get them to start saving early unless they actively opted out. 82% of employees at companies with auto-enroll programs are enrolled and yet, most people are still woefully behind when it comes to retirement savings. The problem is multi-pronged—auto-enroll programs usually leave out large parts of the existing workforce because they only enlist new workers; and most auto-enroll plans begin with a savings rate of 3%—far too low for most people to reach their retirement goals in time. So how much money should you be aiming to sock away? Whether you’re just starting out on a road to financial independence, saddled with debt or getting ready to retire, Patt and her guest field all your financial questions about saving, or trying to save money.
Beth Kobliner, member of the President’s Advisory Council on Financial Capability; author of the bestselling book Get a Financial Life