Brief How Much Might Automatic IRAs Improve Retirement Security for Low- and Moderate-Wage Workers?
Barbara Butrica, Richard W. Johnson
Display Date
Download Report
(2.6 MB)

Automatic individual retirement accounts (IRAs) could significantly boost retirement savings for millions of low- and moderate-wage workers. A proposal embraced by the Obama administration would require most employers that do not offer retirement plans to establish IRAs for their employees and automatically direct a portion of pay into the accounts, unless employees opt out. Our results, based on the Urban Institute's microsimulation model, show that automatic IRAs would boost retirement incomes for as many as half of low-income retirees and three-fifths of moderate-income retirees. For both groups, mean age-70 incomes among those who gain would increase by nearly a fifth.
Research Areas Aging and retirement
Tags Older workers Pensions Retirement policy
Policy Centers Income and Benefits Policy Center