Start Today and Retire Tomorrow (START)
Post on 24-May-2015
DESCRIPTIONA new idea to help raise the US savings rate.
- 1. WHEN IT COMES TO YOUR FUTURE, START NOW. MICHAEL RICHARD Start Today and Retire Tomorrow (START)
2. Current Problems Current problems with US savings? Saving too little overall Saving too little for retirement, if at all Too many confusing savings programs such as: 401(k), IRA, SIMPLE IRA, UTTMA, 403(b) We need a unified solution for every age and situation 3. START now! Start Today and Retire Tomorrow A 401(k)-style program that is independent of an employer and age Minors can be signed up by their parents at any age or automatically by 18. Deposits can be made by direct deposit by employers or by check/cash Encourages children to save early 4. START now! Modeled after the Federal Governments Thrift savings plan Deposits would be tax deferred until retirement Potential for government match along with an employer match replacing 401(k) match Portability, flexibility and simplicity are key concepts with START 5. Some details of START Access to same low-cost investments that Federal Employees have Allows investment from non-employer sources (i.e. tax refunds, gifts) Access to 401(k)-style program for everyone Tax savings and incentives through federal matching Changes the culture of retirement savings 6. Investment options through START Several low-cost investment options are currently offered through the federal Thrift Savings Plan Government Securities Fund Fixed Income Index Fund Common Stock Index Fund Small Cap Stock Index Fund International Stock Index Fund A series of Lifecycle funds These few, low-cost choices fit in well with STARTs philosophy of simplicity and flexibility 7. Advantages of START Gifts of savings bonds could instead be deposited directly to the account of the minor Compounding will ease future savings needs Simplifies the retirement investing process Uncomplicated for the non-investor Doesnt replace Social Security, but supplements and supercharges it. Encourages saving even among minors 8. Summary 401(k)-style plan modeled after the US Governments Thrift Savings Plan Open to any age and any employment status Can be funded from any source Encourages tax deferred saving even at a young age Attempts to change the culture of saving Portability, flexibility and simplicity are the defining concepts of START