Could automatic IRAs boost nest eggs by $490 billion?

Everyone knows how hard it is to save for retirement.

If you want to open an IRA, you have figure out the difference between a "Roth" or "traditional" IRA. Then you fill out some forms, get a piece of your paycheck direct deposited to the IRA, which means filling out more forms. And if you want to invest your savings, you review a bunch of mind-numbing prospectuses. All too often, inertia prevents people from signing up.

But what if you had to choose not to save a piece of your paycheck each week. That's the idea behind a number of state proposals that aim to automatically enroll you in a retirement savings plan, unless you specifically tell your employer you want to "opt out" of the program. It turns out that millions of other American workers would be a lot further ahead saving for retirement, according to a new analysis by the Employee Benefit Research Institute (EBRI).

Read MoreAre automatic IRAs coming to your state?

At the current savings rate, EBRI researchers estimate that households of Americans age 35 to 64 are going to come up short in retirement by more than $4.13 trillion. If those households were covered with an automatic IRA plan at work that set aside 3 percent of their paychecks, the deficit would fall by about $270 billion. With a 6 percent contribution, the gap would be narrowed by $490 billion to $3.64 trillion. Of course, a lot depends on how many people chose to opt out of automatic IRAs. Those EBRI numbers assume everyone stays in the plan.

The analysis looked at the impact of automatic IRAs on "retirement readiness" using a model developed by EBRI in 2003 to assess how well Americans were prepared for retirement. In addition to savings levels, the retirement readiness model looks at a number of other factors that help or hurt future retirees' financial prospects, including financial market risks, future health-care costs and changes in life expectancy. EBRI researchers compared how automatic IRAs would affect workers of a variety ages at small, medium and large businesses.

With automatic IRAs, the biggest improvements in retirement readiness would come from workers at small companies, EBRI found. That's mostly because a greater share of large employers are already offering some form of retirement savings plan, such as a 401(k), and many of them have already switched to automatic enrollment. Fifty-six percent of large companies offer retirement plans with automatic enrollment, according to a 2013 report by WorldatWork and the American Benefits Institute.

Read MoreAre automatic IRAs coming to your state?

Automatic IRAs has been studied by two dozen states, but only one has adopted it so far. This year, Illinois became the first state to put in place a new program to expand retirement savings plans for workers who don't already have them. Starting in 2017, employers who have been in business for more than two years and have more than 25 workers on the payroll will be required to automatically sign up their workers for a state-sponsored IRA account. The plans will be funded by an after-tax paycheck deduction of at least 3 percent. (Washington state has moved to set up a marketplace offering workers various options, but the companies are not required to offer them.)

President Barack Obama has proposed setting up automatic IRAs at the federal level, and has launched the myRA (my Retirement Account), a voluntary program for workers not covered by a retirement plan at work. The Treasury Department has yet to release enrollment details about those plans.

While EBRI researchers have estimated the possible benefits of automatic IRAs, it remains to be seen if state governments and businesses will opt into them.