Richad Walker: You can’t force low-income earners to invest for the future

Re “Help low-wage workers save for the future” (Page 8A, Aug. 19): Your editorial praise SB 1234. The bill is designed to help a low-wage earner who doesn’t have a pension or 401(k) save for the future. This bill is a total farce. It only creates another bureaucracy. Taking 1 percent as an administrative fee is expensive. Check the rate of return on those Treasury bills. They’re hardly a sound investment after deducting 1 percent. This is just another way for legislators to make jobs for their friends.

You ever hear of an IRA, where you can invest $5,500 per year? What low-wage earner could afford to put that much away? Now, with today’s restrictions on financial advisors being able to give only financial advice that is in the best interest of the client, this bill is too late. Having restrictions on funds that can be invested by non-financially astute investors would be far better. Like target-date funds that charge much less than that 1 percent or balanced funds, both of which outperform Treasuries.

Check the statistics on how many people invest in 401(k)s. Many people making more than the low-wage earners choose not to invest even when they get matching funds (free money). This is just another feel-good legislative action creating a needless bureaucracy.

This story was originally published August 22, 2016 at 4:29 PM with the headline "Richad Walker: You can’t force low-income earners to invest for the future."