Too many people are not only struggling to stay afloat now, they are also working toward a retirement in which they will likely be broke, U.S. Treasury Secretary Jacob Lew says.
One solution, Lew said Thursday during a visit to Atlanta, is a two-month-old program aimed at encouraging regular contributions to an online savings account through the government.
“It makes it very simple,” Lew said, during an interview with the AJC. “You are completely invested in U.S. Treasuries, the definition of a risk-free investment.”
Lew’s visit included meetings with Atlanta Mayor Kasim Reed and a group of entrepreneurs.
Through the myRA program, Americans without other savings can divert part of their paychecks, bank accounts or tax refund into a retirement account. They can build the total to $15,000 and then transfer it to a private investment account.
Although anyone can register and participate at myra.gov, the main targets of the program are people without savings that are linked to their paychecks, Lew said. “The challenge is reaching people without employer provided savings.”
And there are people even more marginal, he said.
“There are millions of people in the United States who are not connected to the financial system,” Lew said. “One-third of the people working have no retirement savings. And an awful lot of people in their fifties or even their sixties have no retirement savings. And you have to start early.”
Lew said he hopes the next president – whoever that is – will support the program, adding, “I hope it’s non-controversial enough.”
The one-day trip to Atlanta was also meant to underscore President Obama’s economic optimism during his State of the Union address earlier in the week.
Since the worst of the post-recession hangover, the unemployment rate has been cut in half and the economy has added 14 million jobs.
Lew cited record auto sales last year and an increase in average wages.
“I think it would be hard to do a fact-based review of the past 10 years and not say that the economy has been doing well in recovering from the worst recession since the Great Depression,” Lew said. “I won’t deny that there is work to do.”
Lew said he thinks the 2016 outlook is solid, despite a rocky start in the markets and global worries. “As I talk to CEOs, there is an expectation that this year will be a lot like last year,” he said.
Escorted by the mayor, Lew met with with employees of PartPic, a tech company based at Georgia Tech that has built software that allows people to take a photo of a spare part and instantly receive its name and specifications.
“If I tell my wife about this, we will never throw away a spare part again,” Lew said
Reed suggested Cuba – whose roads are dominated by autos that are decades old – as a potential market for the company.
In a closed-door session, Lew and Reed also met with executives of several small businesses, including Pointivo and Smart Gladiator.
Staff writer Katie Leslie contributed to this story.