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Obama unveils plan to encourage savings

With the country still reeling from a severe recession, US President Barack Obama unveiled on Saturday new incentives to encourage individual savings to secure the future of the country's retirees.

world Updated: Sep 05, 2009 15:59 IST

With the country still reeling from a severe recession, US President Barack Obama unveiled on Saturday new incentives to encourage individual savings to secure the future of the country's retirees.

"If you work hard and meet your responsibilities, this country is going to honor our collective responsibility to you: to ensure that you can save and secure your retirement," Obama said in his weekly radio address.

The collapse of the real estate market and a steep drop in stock market values have resulted in a loss by Americans of about two trillion dollars in retirement savings in just over the past two years, according to US government data.

Obama also pointed out that half of the country's workforce did not have access to a retirement plan at work, and fewer than 10 percent of those without workplace retirement plans had one of their own.

"We cannot continue on this course," said the president. "And we certainly cannot go back to an economy based on inflated profits and maxed-out credit cards; the cycles of speculative booms and painful busts; a system that put the interests of the short-term ahead of the needs of long-term."

Obama's plan calls for expanding opportunities for automatic enrollment in employer-provided and other retirement savings plans, helping people convert tax refunds as well as their unused vacations and sick leave into savings among other measures.

"We have to revive this economy and rebuild it stronger than before," Obama argued. "And making sure that folks have the opportunity and incentive to save - for a home or college, for retirement or a rainy day - is essential to that effort."