In his push for boomer votes, President Obama talked up retirement in several policy proposals. Here's what will happen if they pass:
Automatic enrollment plan -- Employers that do not currently offer a retirement plan would be required to enroll their employees in a direct-deposit IRA account that is compatible to existing direct-deposit payroll systems. Employees could opt-out if they choose.
Bankruptcy laws -- Obama supports putting retirement plan promises to workers higher on the list of debts that are protected in bankruptcy. This would restrict executive bonuses while protecting worker pensions; increase the amount of unpaid wages and benefits that workers can claim in court; and limit the circumstances under which retiree benefits can be reduced.
Disclosures -- Obama will establish annual disclosures to participants about pension funds' investments, including full details about the projects in which the fund is invested in, the performance of those investments and appropriate details about probable future investment strategies.
Retirement income -- Seniors making less than $50,000 per year would pay no more income taxes.
Saver's Credit -- The earnings threshold of the retirement saver's credit would be raised from $52,000 (for couples) to $75,000, and the credit would be refundable.
Social Security -- Obama opposes raising the retirement age and opposes any privatizing of Social Security. Those making more than $250,000 would see their contributions to Social Security rise.
Retirement plan withdrawals -- Obama would suspend required withdrawals from retirement accounts, which kick in when participants attain 70 1/2. In addition, he proposes allowing those younger than 59 to withdraw up to 15 percent of their IRAs or 401(k) accounts, up to a maximum of $10,000, without having to pay the 10 percent penalty for withdrawing early, though income tax still would apply.
Source: CCH
