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How to Best Help Low-Wage Workers Save for Retirement

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A new report from the American Enterprise Institute suggests that state efforts to automatically enroll workers without employer-sponsored retirement plans in Individual Retirement Accounts (IRAs), may not be an effective means of helping low-wage workers save. How Hard Should We Push the Poor to Save for Retirement? finds that for low-income workers, the costs of automatic enrollment in IRAs – unforeseen debts and difficulty accessing means-tested safety net benefits – likely outweigh the benefits. The report suggests that states exempt the poorest workers, such as those earning less than $12,000 per year, from automatic enrollment in IRA programs.

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