There are powerful links between retirement savings, emergency or rainy-day savings, and household wealth.
They can also reduce the need to prematurely take money out of a retirement account.
Unsurprisingly, there are significant disparities by race and ethnicity.
White households are also more likely to have retirement savings in the first place.
An Auto IRA combines a payroll deduction IRA with automatic enrollment.
Access to a payroll deduction retirement savings program is an essential part of building retirement security.
Findings
like see thefull reportfor a detailed discussion of the data and assumptions used in the model.
White assets increased by 71 percent, while Black and Hispanic households saw an 89 percent improvement.
Workers who started saving in their 20s saw an even greater increase in assets by age 68.
Liquid fundsshow the same pattern of improvement as that in net worth at retirement.
like see thefull reportfor comprehensive findings.
Conclusion
A universal and simple savings system using payroll deduction could substantially improve household wealth for its participants.
Unfortunately, this key in of savings program is not available to millions of Americans.
The people who would especially benefit from a savings plan are often the ones who lack access to it.
What is driving these losses, and what can be done to mitigate them?
