PT  - JOURNAL ARTICLE
AU  - Timothy F. Harris
AU  - Kenneth Troske
AU  - Aaron Yelowitz
TI  - How Will State-Run Auto-IRAs Affect Workers?
AID  - 10.3905/jor.2018.6.2.027
DP  - 2018 Oct 31
TA  - The Journal of Retirement
PG  - 27--33
VI  - 6
IP  - 2
4099  - https://pm-research.com/content/6/2/27.short
4100  - https://pm-research.com/content/6/2/27.full
AB  - In order to encourage savings among workers without access to employer-sponsored retirement plans, several states have proposed defaulting workers into state-run individual retirement accounts known as Auto-IRAs. Plans such as OregonSaves automatically enroll workers and, by default, increase their contributions over time. Given low opt-out rates, these policies have the potential to increase retirement savings for workers without access to employer-sponsored plans. Using survey data, we find that over 24 million workers could automatically be enrolled in an Auto-IRA, if enacted on a national scale. Nonetheless, these policies have the potential to adversely affect individuals with debt and current financial difficulties who do not actively opt-out. One-third of potentially affected workers hold credit card debt with an average balance exceeding $5,000. Furthermore, approximately 15% of potentially affected workers have difficulty meeting basic needs.TOPICS: Pension funds, legal/regulatory/public policy, retirement