Question

The Bureau of Economic Statistics estimated that the average savings rate for U.S. citizens between 2006 and 2009 fluctuated between 2% and 6%. Since the typical person in 2009 made around $26,000, the typical savings per year is between $520 and $1,560. These figures include saving for home down payments, weddings, cars, education, and businesses, in addition to retirement. Why might government incentives for saving in IRAs and 401(k)s fail to encourage most people to save for retirement?

Answer 1

Select the best answer from the choices provided.
Social Security is not included in these figures and it provides an ample income for most people's retirement needs.
Most workers today are covered by pension plans, which are more popular than 401(k) plans in private businesses.
Tax breaks for retirement savings are not much of an incentive for people making less than $30,000 a year.
The government does not offer incentives to save in 401(k) plans or IRAs.