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Obama Unveils Savings Proposal for Workers Lacking 401(k)

Source: United Benefit Advisors (UBA)

President Barack Obama is offering more Americans the chance to put away money for retirement through payroll deductions with a plan for new government-sponsored savings accounts. According to a Bloomberg article, the accounts, which Obama announced in a State of the Union address, will be aimed at workers who don’t have access to a 401(k) plan. The “MyRA” plans will be similar to individual retirement accounts.

Under the proposal, workers could have part of their pay deducted for deposit into an account invested in U.S. government bonds that would be treated for tax purposes as a Roth individual retirement account, with future earnings tax-free. According to a White House fact sheet, the accounts would be open to people with an annual household income up to $191,000 whose employers choose to participate.