Retirement Crisis: Will This New Proposal Solve It?

Many see the lack of retirement savings among the American population as a retirement crisis waiting to happen, as workers age without the financial safety-net they need after they stop working. But one proposal is aiming to fix this by using a model similar to what some other countries use.

In the following video, Dan Caplinger, The Motley Fool's director of investment planning, looks at a proposal to have employers contribute $0.50 per hour to a private universal retirement account. Dan cites proponents' figures that this would generate $1,000 per year in retirement savings, which could build to $160,000 over a 45-year career based on past returns. Dan points out that this is similar to Australia's superannuation scheme, which requires employers to contribute 9.25% to retirement accounts on behalf of their workers. Yet opponents argue that even though these savings are automatic, they could pressure wages downward and make life even harder for the low-income workers that the measure is meant to help.

How to get even more income during retirement
Social Security plays a key role in your financial security, but it's not the only way to boost your retirement income. In our brand-new free report, our retirement experts give their insight on a simple strategy to take advantage of a little-known IRS rule that can help ensure a more comfortable retirement for you and your family. Click here to get your copy today.

Read/Post Comments (1) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On April 13, 2014, at 10:05 PM, Richard233 wrote:

    So, basically another system like social security. Yet another fund that will eventually be tapped by someone if given a chance.

    The original SS was set up with the idea it would always generate a surplus, but the politicians were too cowardly to automatically adjust the starting age leading to the current situation we have today.

    They used the funds to bankroll one failed social scheme after another. Given half a chance, these funds will be raided by a politician or a banker of some stripe.

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2913024, ~/Articles/ArticleHandler.aspx, 9/2/2015 9:07:39 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Dan Caplinger

Dan Caplinger has been a contract writer for the Motley Fool since 2006. As the Fool's Director of Investment Planning, Dan oversees much of the personal-finance and investment-planning content published daily on With a background as an estate-planning attorney and independent financial consultant, Dan's articles are based on more than 20 years of experience from all angles of the financial world.

Today's Market

updated 11 hours ago Sponsored by:
DOW 16,058.35 -469.68 0.00%
S&P 500 1,913.85 -58.33 0.00%
NASD 4,636.11 0.00 0.00%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes