President Obama has taken Washington by storm and is working hard to make some necessary changes. As the Democratic Party controls Congress, they are set on bringing about changes with the 2010 budget. With the downfall of the economy, many workers have lost their hard earned money in their 401Ks. About 60% of Americans use 401Ks as the primary vehicle for savings.
President Obama plans to establish a program in which all workers are automatically enrolled in the employer's retirement plan. While this wouldn't be mandatory, this plan would prove beneficial to many employees. This new plan would also repeal the last president's work that allowed mutual funds to offer advice to 401K participants.
The plan also allows employees to opt-in or opt-out of the plan. The companies that don't offer 401Ks will have to offer a direct deposit into an individual retirement account.
While the benefits of this plan are enormous, there's a big downfall - increasing prices. A plan like this might not be as cost effective and may even reduce the services the consumer receives.
What are your thoughts on this new proposal?
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