Pay Yourself First: Just as a 401(k) plan puts money into your retirement plan directly out of your salary, you can set up an automatic investment plan to move funds from your bank to an investment.
In addition, individuals who die and are subject to federal estate tax can obtain an automatic payment plan to the extent that the tax is attributable to actively managed real estate businesses.
But remember, you need to be disciplined if you are going to forgo a 401(k) for an IRA--make sure you set up an automatic investment plan for the Roth, something you can do through many mutual fund companies.
If you are an employer, do your staff a favor and default them all into an automatic-escalation plan.
But the key here is that the employer has to offer both a 401(k) plan and automatic enrollment.
Nearly one-quarter are likely to add an option for employees to elect an automatic payment option from the plan over an extended time.
Congress has another 13 months to come up with a budget plan to avert the automatic cuts.
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Employers need to be encouraged to institute plan features such as automatic enrollment with opt-out and stepped up contributions.
Britain, with New Zealand, is breaking new ground in introducing a retirement-saving plan using the device of automatic enrolment.
Employers plan to continue to adding automatic features and expanding savings choices.
In response, nearly one-quarter of employers plan to make changes to their automatic feature in 2012, including an automatic contribution escalation feature and increasing the initial default rate.
Democrats, who offered their own plan Thursday, want to replace the automatic cuts with a mix of tax increases and more gradual spending cuts.
But the plan is for the system to be switched to automatic operation over the coming months.
Indeed, it is not much of a stretch to suggest that these rules are the reason we have seen the widespread adoption over the years of employer matching contributions, automatic enrollment, automatic escalation of contributions, and numerous other innovations in the retirement plan space that have been shown to increase saving.
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The plan, called "the G5 pilot", would enable automatic information exchanges.
That's why I'm announcing my plan today to provide every single American with an easy, automatic opportunity to save for future through an account I'm calling an American retirement account.
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One way to exploit that inertia for a better outcome is automatic enrollment, in which employers default all new workers into the retirement plan unless the workers refuse to participate, which they are free to do at any time.
The IRS has a withholding calculator that can help you determine the correct amount, (click here.) If you make an adjustment, be sure to capture the increase in your paycheck and put those dollars to the best use, whether it is setting up an automatic transfer from a checking to a savings account or increasing your retirement plan at work.
In the 2011 debt ceiling deal that ended a showdown over whether to increase the federal government's borrowing limit to meet its obligations, Congress and the White House agreed to include the automatic spending cuts of sequestration as motivation to pass a comprehensive deficit-reduction plan.
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