“People give their time to their job. They shouldn’t have to fear what happens when they’re done working.” — Molly Sumner of Kindred Companions
Molly Sumner of Frenchtown, N.J., owns a small business called Kindred Companions, training dogs and selling pet supplies. Unfortunately, Molly’s employees are some of the nearly 2 million New Jerseyans — and 55 million Americans — who don’t have a retirement savings plan through work. “It’s something I want for my employees,” Molly says, but not something she can currently provide.
Why is a savings plan at work so important?
In a recent survey of New Jersey registered voters age 35 to 64, 65 percent said they were anxious about having enough money saved for retirement. A way to save at work could help ease this anxiety. In fact, when workers have a way to save for retirement through their job, savings rates increase 15 times.
The New Jersey Secure Choice Savings Program Act
That’s why AARP and small-business owners like Molly are fighting for the New Jersey Secure Choice Savings Program Act, a bill that would help New Jerseyans save for their future.
Passed by the New Jersey Assembly with bipartisan support just last week, the bill would give employees a convenient way to save for retirement through an easy payroll deduction at work and give employers like Molly a competitive edge. The plan would be set up by the state and then used by people like Molly’s employees, Molly herself, or anyone else that needs a way to save for their future.
In a recent Wall Street Journal article , Richard Thaler, a professor at the University of Chicago Booth School of Business, stressed the importance of this type of plan:
“…every American worker should be able to save for retirement via payroll deductions… If Congress cannot get its act together to pass some enabling legislation, then other states should follow the lead of Illinois and create their own plan. It’s not a burden on employers. In fact, you’re doing a favor for small employers because they can offer something valuable to employees and be a more attractive place to work.”
AARP urges the New Jersey Senate to quickly pass the Secure Choice Savings Program Act and calls on Gov. Chris Christie to sign it. It’s time to give small-business owners a competitive edge and help nearly 2 million New Jerseyans save for their future.
States gear up for action in 2016
If Secure Choice is signed into law, New Jersey will be the fourth state to create a workplace retirement savings plan for its residents — following Illinois, Washington and Oregon. Which state will be the fifth? While they go by different names — Work and Save, START and more — momentum for plans like New Jersey’s Secure Choice is growing across the states. Additionally, the U.S. Department of Labor has given states the green light on these types of plans, leaving a clear path for action in 2016.
Follow me on Twitter @RoamTheDomes to follow along as AARP goes to work in state capitols across the country to ensure you can live the life you want in retirement.
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.