Monday, June 16, 2008

Obama: Auto 401(k) enrollment

One of Obama's plans to "help" the middle and lower classes is to force employers to automatically enroll their employees into 401(k) plans. The government would then match up to $500 of the money deposited for each employee. Before I state my issues with this plan, let me say that I am all for retirement savings. It's a good thing, everybody should do it if they can. With that said here are my issues. First, the reason most lower class people don't enroll in any retirement program is because they can't afford it. When you're stretching to make ends meet, you don't have an extra $80 a month to spend on retirement. I know it seems like a small amount of money, but when every month you have to pick which bill you're NOT going to pay it's a huge number. So, even with the $500 tax credit it's going to hurt. My other issue is this tax credit. Isn't the government already taking money out of my check for my retirement - yes, I seem to remember this thing called Social Security. I'm not a dunce so I realize that there is a greater chance of pigs growing wings and flying than my retirement being funded entirely (or at all) by Social Security. Yet every pay period more money comes out of my check. So, rather than having the government spend another $18.8 billion trying to force convince us that saving is a good idea, why don't they give me that money they're already taking out of my check to invest in my 401(k). Oh, wait...that would be 'privitization' and we don't want that now do we.

One of the mantras of the pro-gun lobby is that if we enforced the laws on the books we wouldn't need new laws. I think that this is a very similar issue. If we allowed people to safely invest the money already being taken out of their checks we wouldn't have an issue with retirement savings. And we wouldn't need a new tax credit - that's going to cost us more in the end by way of higher taxes to pay for it - to convince us that we should save.


"Nick" said...

Really good points.

shadowmom1 said...

Is there any difference between this and the allowing us to "invest" a small portion of our own Social Security deductions? I mean in the sense that democrats were very much against our having any control over our own retirement funds.
Of course, this new idea will just cost all wage-earners (and tax payers) more in government mandated ideas. Not good.

CRCHAIR said...

To me, this is the same as some local governments paying kids cash for school related performance or attendance. The Government can make laws encouraging people to do what is beneficial for society as a whole, but should not flat out pay anyone to do what is right. When you pay someone to do what is right, then they feel like they are giving up something they were entitled to in order to do what is right. So the thing they gave up now has value ascribed to it even if it was a bad thing to start with.