So, apparently, we have a new program coming up, called Illinois Secure Choice. It's s Roth IRA. It's voluntarily. But if you do nothing, in 30 days you are automatically enrolled at 5% of your paycheck.
You are charged an annual fee of 0.75% for every $100 contributed.
You can opt out at any time.
Personally, I'm out. I don't trust this state's government. At all. I've got my own IRA set up. I don't want or need Illinois' help.
Just a heads up.
If this was any other state, I wouldn't be suspicious. However, with IL economics being what they are I would not trust the state with ANY additional financial involement.
Pretty Sure this is only for employers who don’t already offer a retirement plan. So if you have a 401k/403b through your employer you aren’t included in this.
In reply to mtn :
I do believe you are correct.
I think CA has something similar, but I don’t think it’s compulsory.
I suspect they don’t want to make people that aware. It’s a sort of retirement plan for the financially inept (or unable, in which case you may not be helping). I am sure if this goes on a while without people realizing, eventually someone will realize you can do hardship withdrawals and take loans against it (insert shady business “helping” people access their money) which of course are highly penalized.
Some WAG math shows an easy $7.5M collected annually in fees. Quite possibly many times more than that.
On one hand, that’s a genius way to tax residents & get a large portion of them to willingly agree to it. On the other, I’d be quite untrusting if whatever they say that money is going toward.
Being charged a fee of any amount is a huge ripoff. Setup a Roth IRA at a low cost provider and save a bunch of $ in the process. 0.75% is rediculous.
It has been a joke as long as I can remember how corrupt this state is. But now it is really starting to cost everyone a noticeable amount of money in increased taxes and fees and yet we keep voting the same people in somehow. My employer is regulated by the state, so to get anything changed or approved apparently some people would need a payoff or you are out of luck. Then when someone finds out,you are in trouble but the politician skates.
In reply to BlindPirate :
IL political corruption was one of the reasons we moved. What I experienced on the local level was eye-opening enough that I can only imagine what’s happening at higher levels.
Ok so it's an attempt to provide some retirement savings for people who work for companies that dont offer it. What's the problem here?
Well I hadn't heard about this and I live in IL, so that's a small problem.
But I wonder if there are people who make too much for a Roth IRA that are automatically getting enrolled...
I'm also curious why it is done as a Roth in general.
In reply to Fueled by Caffeine :
The 0.75% the state is skimming off the top for their own coiffures, and the apparent lack of disclosure about it.
This program is hardly new, nor was it a secret. Pat Quinn (two governors ago) signed it into law in 2015, and this is just the last wave of registration, which is for employers with 25-99 workers who would be eligible for unemployment compensation. Businesses with 100-499 workers were required to register back in July, and businesses with over 500 employees had to register in November of last year. And as mtn said, it is only for businesses that don't already offer a retirement program.
I'm not here to offer opinions on whether or not this is a good program, whether Illinois is too corrupt or other political topics, just the facts abut the program.
Pete Gossett said:In reply to Fueled by Caffeine :
The 0.75% the state is skimming off the top for their own coiffures, and the apparent lack of disclosure about it.
No lack of disclosure. Its bee out there for years.
Also 0.75% as an expense ratio is fairly rational. Vanguard does 0.52% and they're known as about the lowest around. Some dude wanted to charge my sister 1.5% 0.75% is hardly a bad deal. It's not great but its not terrible.
Even so, its the fact that its this particular state. They have proven to be untrustworthy.
There is a secretive, shady nature to almost everything this state does that there is a healthy distrust by most citizens. We wouldn't put it past them that they hope people won't notice or remember this program.
If you don't remember it being enacted in 2015, do you deserved to be suprised in 30 days?
My personal feelings aside, I wanted to get the word out. That way you can make your decision, instead of having it made for you.
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