A Secure Retirement: American Dream or Pipe Dream?

I often hear from friends and family members that they're afraid they don't have enough saved for retirement, and the truth is, many Americans are not prepared for the future. As recently highlighted by the New York Times, the reason many are not financially prepared is because they don't have the right tools at work to help them save for their future. In fact, when individuals have a way to save through their workplace, their rate of savings goes up by a staggering 1300%. Yes, that's right: 1300%.

That's why AARP is fighting across the country for Work and Save plans, a convenient way to save for retirement that benefits both businesses and employees. The plan is set up by the state and then can be offered to employees by small businesses, and used by the self-employed, or anyone who needs a way to save.

Here are just a few of the individuals a Work and Save plan would help:

Meet Mark Mullet, a State Senator in Washington and a small business owner of a pizzeria and ice cream shop.  Senator Mullet wanted to offer retirement savings plans for his employees, many of whom have been working for years and saved very little.  He found setting up a savings plan for his employees was easier said than done.

It's an expensive, painful and onerous process...I think it's why small businesses aren't doing it. Senator Mullet

State Sen. Mark Mullet and employee Sidar Tun

Meet Sidar Tun from Washington, general manager of one of Senator Mullet's businesses.  She wants to build a retirement fund to make sure one day she can retire with confidence. However, she has worked at food, retail, and orchard jobs since she was a teen, none of which have offered her a way to save for her future.

I want to make sure I'm financially OK. — Sidar

Meet Dorry Clay from Connecticut who was working as a professional artist when the recession hit.  She lost her job and then was diagnosed with cancer.  While recovering Dorry started her own website and graphic design company, but all her savings were already gone and she had added new debt.  As a small business owner she has no access to a retirement plan at work, no savings, and can't afford to retire.

Financial pressures and growing debt have made retirement savings more pipe dream than an American dream.— Dorry

Meet Susan Krautbauer, a Minnesota resident who has both owned and worked for small business throughout her career. Today, she and her husband own a company that offers staffing and high tech services.  They have one other employee now, and expect to keep growing the business.    Susan wants to be able to offer a retirement plan for her employees but costs are high and options are limited.

It's hard to be a competitive employer that can attract and retain quality employees when I can't offer standard benefits. — Susan

Secure Choice Presser
Susan Krautbauer

Stories like this are not uncommon. In fact, 57 million Americans do not have the ability to save through their job. It's time for common-sense solution that will help you and your family save so you can take control of your future and live the life you want in retirement. But what would a Work and Save plan mean to these individuals?

Here are the highlights of Work and Save:

  • Benefits businesses. Mark and Susan would be able to help their employees save for their futures because Work and Save  makes it easy for businesses to offer their employees a retirement fund and gain a competitive edge in the marketplace.
  • Choice. It's up to each employee to decide if, and how much, he or she wants to contribute to an account. The plan would offer a wide array of investment options for savers - such as equities and mutual funds. Additionally, small businesses would be able to offer lower-fee investment options to their employees.
  • Easy to save. Sidar wouldn't have to feel overwhelmed figuring out to save because employee contributions could be deducted automatically from each paycheck
  • Portability. Anyone would be able to bring his or her retirement savings with then if they switch jobs, the account follows them so they can continue to save.
  • No ongoing cost or risk for the state. Work and Save plans are intended to be self-sustaining, and will be 100 percent participant funded after initial start-up costs. A Work and Save plan is not a public pension, and the funds cannot add to the state's pension liability.

State Updates

Fortunately, states are stepping up with solutions, like Work and Save, to help their residents save for a secure financial future, and momentum is building.  Growing from just a few states in 2013, this year 17 states are working towards helping their residents save for a secure financial future. Here are some key state updates:

  • In Illinois, legislation will be back on the floor in November that, if passed, would implement a Work and Save plan in the state. The plan is backed by consumer groups as well as well as some of the financial industry including Ariel Capital, a financial firm based in Illinois.
  • California, Connecticut, and Minnesota are all working on feasibility studies to look at the best ways to implement a Work and Save plan in their states.
  • Oregon, Maryland, Utah, West Virginia, Washington and Nebraska have all created task forces or issued studies on Work and Save plans. In Maryland the task force is supported by Legg Mason, a Maryland based financial firm.
  • Colorado, Indiana, Virginia, Wisconsin, Arizona, and Ohio are also looking into ways to ensure secure financial futures for their residents.

We're continuing to fight to help people live the life they want and have a secure financial future.  Follow me on Twitter  @RoamTheDomes for more news on  advocacy across the country. And to stay up to date on our AARP advocacy in the states, sign up for the  AARP Advocates e-newsletter or visit your state Web page.


Search AARP Blogs

Related Posts
December 11, 2018 10:07 AM
In an election year filled with partisanship and political fights, it’s no surprise that many Americans feel that their voices aren’t being heard or that the issues that affect their lives aren’t being addressed. But, many outstanding elected officials work hard every day to make a positive difference for their constituents.  That’s why AARP recognizes state legislators, governors, and other elected officials – from both sides of the aisle – who have stepped up and worked together to write, support, and advance common-sense policies that help older Americans remain in their homes and communities and retire with confidence. AARP is proud to announce our fifth annual bipartisan class of Capitol Caregivers, who fought this year to increase support for family caregivers and their loved ones, along with our fourth annual bipartisan class of Super Savers, who championed policies that enhance retirement security.
December 05, 2018 01:06 PM
Caroline is a mother of two children and a preschool teacher who unexpectedly became a family caregiver for her father after he suffered a major stroke. Her father, Tom, now deceased, lost the use of his right side and his ability to speak. Multiple surgeries and rehabilitation treatments later, he was able to live at home with the help of nurses. But it was up to Caroline to provide daily care, such as overseeing appointments and handling certain nursing responsibilities, like managing his medications. “I became the person my father could rely on more than anyone in the world,” Caroline said. “I became his safe place and his best friend.” In communities across the country, family caregivers like Caroline are caring for older parents, spouses and other loved ones, helping them to remain at home – where they want to be. Their tasks are done out of love and commitment, but are not easy. That’s why AARP is fighting for family caregivers and their loved ones in every state. In 2018, AARP advanced new policies to provide more help at home, flexibility at work, training, relief and more, which will benefit over 30 million family caregivers. Here are a couple highlights:
November 27, 2018 08:55 AM
A few months ago, I wrote a blog about the vital role that transportation options play in what we at AARP call “livable communities” – great places to live for people of all ages. Being able to get around is critical to earn a living, raise a family, contribute and stay connected to your community and enjoy life. And, having alternatives to getting behind the wheel of your own car is particularly important for older adults who want to stay in their homes and communities as they age.