The Automatic IRA has been proposed as a way for the roughly half of U.S. workers that are not offered a 401(k) or any other type of employer-sponsored plan to save for retirement.

The Auto IRA would enable employees to use an employer’s payroll system to channel savings to an IRA, similar to the way in which employees save through a 401(k). Employees would initiate saving, using their own money and choosing how much and where to save. Benefits include:

As currently proposed, automatic IRAs would be provided by existing financial institutions and could be chosen by either the employee or the employer, while still allowing each employee to transfer funds to a preferred IRA provider. A temporary tax credit has been proposed to companies offering an automatic IRA, to offset any administrative costs of implementation.

For more information on the Automatic IRA proposal see:

Annual Report of the White House Task Force on the Middle Class

Helping Workers Save for a Secure Retirement

Letters to the Vice President

Automatic IRA Builds Retirement Security

Automatic IRAs: Extending Retirement Saving Opportunities to 78 Million More American Workers, Retirement Security Project

What the Media and Others are Saying about Automatic IRA, Retirement Security Project

What Auto IRA Means for Small Businesses, AARP

Pursuing Universal Retirement Security Through Automatic IRAs, J. Mark Iwry and David C. John. Retirement Security Project Policy Brief

“Saving for Retirement at Work: Employee and Business Reactions to an Automatic IRA Concept,” Prudential’s Four Pillars of Retirement Series. January 2008.

Check RMS Media Stream for Auto IRA news.