President Barack Obama on Tuesday proposed a new method for saving for retirement during his 2014 State of the Union address.
“Let’s do more to help Americans save for retirement,” the president said during his speech, going on to note that most workers don’t have a pension, and that Social Security checks alone often aren’t enough to cover retirees’ cost of living.
And while the stock market has doubled in the last five years, he continued, its performance has no benefit for people without 401(k)s.
“That’s why, [Wednesday], I will direct the Treasury to create a new way for working Americans to start their own retirement savings: MyRA,” he said. “It’s a new savings bond that encourages folks to build a nest egg. MyRA guarantees a decent return with no risk of losing what you put in.”
The president also urged Congress to work with him to fix an “upside-down tax code” he says gives big tax breaks to help the wealthy save, but doesn’t do much for middle-class Americans.
“Offer every American access to an automatic IRA on the job, so they can save at work just like everyone in this chamber can,” Obama said to an audience that included five Supreme Court justices, First Lady Michelle Obama, Vice President Joe Biden, and members of the U.S. House of Representatives and Senate.
The MyRA would be offered through a Roth IRA account and would be backed by the U.S. government, similar to savings bonds. Earnings from investments made with Roth IRA contributions can be withdrawn tax- and penalty-free.
View the transcript of the president’s Jan. 28 State of the Union address.
Written by Alyssa Gerace
