SAVING FOR RETIREMENT could soon get easier, but perhaps also riskier, for many low- to middle-class workers.

Thank the Obama administration—and President Bush.  If you listened carefully to President Obama’s State of the Union speech Wednesday night, you might have noticed his mentions of initiatives about retirement reform. While the proposals played a minor role in the address, they could trigger vast changes in how millions Americans save for retirement.

To give Americans’ retirement savings a jump-start, President Obama pushed for employers to allow for automatic direct-deposit individual retirement accounts, or IRAs, for workers who don’t currently have access to existing retirement plans. He also called on Congress to authorize larger tax credits to match workers’ retirement savings, as well as craft new safeguards aimed at protecting retirement savings.

While Obama has announced many of these initiatives on various occasions in the past, Dean Baker, a co-director at the nonpartisan Center for Economic and Policy Research in Washington, D.C., thinks the time is ripe for passage. “Not only do these measures have bipartisan support, they even go back to Bush era talking points regarding the expansion of the ownership society,” he says.

If passage occurs, these initiatives would have a positive effect on the savings rate, says Brigitte Madrian, a professor of public policy and corporate management at Harvard University’s Kennedy School of Government. They would increase the number of lower- and middle-class workers who participate in a retirement savings plan and significantly increase the subsidies that low- and moderate-income workers receive. Indeed, early estimates project that, alone, the automatic IRA plan could direct roughly $100 billion into IRAs over five years and give some of the 75 million workers who don’t have access to an employer-sponsored plan an opportunity to save.

However, retirement professionals and analysts warn that the President’s plan might also have some unintended consequences.

First, President Obama’s retirement agenda could bode negatively for the country considering that the longevity of other retirement programs such as Social Security is in doubt. “Taken alone, these provisions don’t in any way hurt Social Security; it’s more about the atmosphere in Washington, which is rife with paranoia around our ability to fund retirement,” says Monique Morrissey, an economist at the Economic Policy Institute, a Washington-based research organization focused on labor issues. Think about it: if something needs to get pitched, what will it be?

Then, even with the expanded saver’s credit, which would match 50% of the first $1,000 of contributions by families earning up to $65,000 and provide a partial credit to families earning up to $85,000, the system still inordinately favors wealthier workers, says Morrissey. “Giving a little money to the bottom- and middle-income segments of the country doesn’t fix the problem that two thirds of subsidies currently available are going to the wealthiest 20% of the country,” she says. According to the Tax Policy Center, people in the top quintile currently receive on average $3,000 a year in tax subsidies for IRAs and 401(k)s. And though the President’s provisions would give more low- and middle-class workers access to what would become a refundable saver’s credit -- that is, workers won’t need to owe income tax to qualify -- “most of the workers in the bottom 20% to 40% don’t have an extra $1,000 to put into the market,” she says.

Although any worker can opt out of these automatic IRAs, those who don’t know they’re being signed up may face penalties if they take their money out prematurely, adds Morrissey.

For William R. Corrin, the president of the Retirement Analyst, a retirement consultancy in Long Beach, Calif., merely suggesting that workers plow their money into the stock market, which has proved infinitely volatile in the last two years, is troubling. “We do personal account analysis for people in 401(k) plans. When we run these reports, a large percentage of people are deeply underwater,” he says. “I’m not sure that forcing people to put money into the market and play in the same sandbox as Goldman Sachs and everybody else is sound.”

Then there’s the toll on small businesses. The smallest companies would be exempt from the administration’s automatic IRA proposal. (Note that firm size is hasn’t been disclosed. However, earlier initiatives suggested that companies with 10 workers or fewer would be exempt.) In addition, new tax credits would help other employers pay for the administrative cost of signing employees up for automatic IRAs. The amount of that credit remains to be seen. But Bill Rys, the tax counsel for the National Federation of Independent Business, a Washington, D.C.-based lobbying group for small businesses, is skeptical that the credit will cover a business owner’s entire costs. Not only do owners have to set up IRAs for their employees, they have to launch automatic payroll deductions. Owners may even have to sit down with a financial planner, he says. “The time cost of that 11th employee skyrockets if 10 is the cut off,” Rys says.