Obama administration announces help for those saving money

The Obama administration has recently announced a new initiative with the intent on giving help to people saving money for retirement.

“If you work hard your whole life, you ought to have every opportunity to retire with dignity and financial security,” President Barack Obama said. “And as a nation we ought to do all we can to ensure that folks have sensible, affordable options to save for retirement.”

One of the ways the administration hopes to help those who want to work on saving money includes expanding automatic enrollment in 401(k) and retirement savings programs. Expanding automatic enrollment will increase participation from 70 percent to 90 percent, though employees have the option of bowing out of the program.

Furthermore, the administration plans on streamlining automatic 401(k) enrollment by creating pre-approval enrollment language for plans seeking automatic enrollment amendments through the Internal Revenue Service.

Also, the administration has announced that payment for unused vacation days for workers leaving their jobs will be eligible to be deposited in the employee’s 401(k) account.

According to the U.S. Bureau of Economic Analysis, the personal savings as a percentage of disposable income dropped from 4.5 percent in June to 4.2 percent in July. Personal savings amounted to $458.5 billion in July.