Think about retiring from your job with no savings — not even a little bit — just debt. Unfortunately this is the case for one in five Utahans, according to a new study released recently by Notalys LLC. This news is troubling, to say the least. To make matters worse, with 45 percent of working-age households having nothing — zero dollars — saved toward retirement, what’s playing out in Utah could have significance nationwide.
That’s why Utah and other states around the country are taking action to remedy this situation by establishing “ Work and Save” plans—a commonsense solution to help individuals save toward a secure retirement. The plans are a win all around, benefiting employees, small businesses and states. The plans are:
- Portable from job to job, easy to use, and give employees choice on how and how much they save.
- Give small businesses a competitive edge.
- Not a pension and can’t add on to the states liability. Plus, with individuals shoring up their private retirement savings, they are less likely to be dependent on government programs.
Still, in my mind, the biggest bonus of Work and Save plans is: When people have a way to save for retirement at work, the rate of their saving increases exponentially — and by that, I mean 15 times.
Right now, state legislatures are discussing options to help their residents retire with confidence. Here are a few highlights:
- Kentucky: Legislation is pending to create Kentucky Retirement Accounts (KYRA), the Kentucky version of Work and Save that would give 800,000 Kentuckians access to workplace savings.
- Utah: The state is considering a Work and Save study to address financial insecurity in retirement. The Notalys study I mentioned earlier found that increasing the savings rate could save taxpayers $200 million over 15 years — a measure supported by 77 percent of Utahans age 25-64.
- Oregon: Last year, Oregon created a legislative task force to study Work and Save. This year, the legislature is considering putting the plan into place, and hearings are scheduled in the coming weeks.
- Maryland: This week, the state will release a report on retirement savings and begin hearing testimony on Secure Choice, the Maryland version of Work and Save.
- Virginia: This month, a bipartisan bill to study the idea of a Work and Save plan passed the Virginia House unanimously.
- Washington and Indiana are looking into innovative ways to help their residents save for retirement through a portal that would connect small businesses with private-sector retirement plans vetted for things like fee structure and disclosure.
Follow me on Twitter @RoamTheDomes for more news on retirement security. 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.
Elaine Ryan is the vice president of State Advocacy and Strategy Integration (SASI) for AARP. She leads a team of dedicated legislative staff members who work with AARP state offices to advance advocacy with governors and state legislators, helping people 50-plus attain and maintain their health and financial security.
Follow Elaine on Twitter: @RoamTheDomes.
Also of Interest
- Groundbreaking Law Will Help 2.5 Million Workers Retire with Confidence
- Relationship Test: How Close Do You Sleep?
- AARP Foundation Tax-Aide: Get free help preparing and filing your taxes
- Join AARP: Savings, resources and news for your well-being
See the AARP home page for deals, savings tips, trivia and more.