AARP advocates for Secure Choice retirement savings option

AARP’s push for more retirement savings options in Massachusetts fell short of the finish line. The Secure Choice Savings Program was an amendment in a $3.5 billion economic development bill.

The economic development bill passed. The Secure Choice amendment did not.

The proposal would have created a state-facilitated automatic savings program. The Massachusetts Secure Choice Savings Program was designed to provide small businesses and employers with free retirement savings options to offer to their employees. The program -at no cost to employers- would automatically enroll workers who don’t have access to employer-based retirement benefits such as pension plans and 401(k) plans.

43% of Massachusetts private sector employees—roughly 1,220,000 people—work for an employer that does not offer either a traditional pension or a retirement savings plan. Access to an employer-based retirement plan is critical for building financial security later in life.

15 states that have passed similar so-called “Work & Save” programs: California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maine, Maryland, Minnesota, Nevada, New Jersey, New York, Oregon, Vermont, and Virginia.

Work & Save accounts help Americans save for retirement and reduce reliance on taxpayer-funded programs. Making it easier for people to set aside even modest levels of savings during their working years will pay dividends for workers and taxpayers in the long run.

Although individuals without access to a way to save for retirement at work could open up their own individual retirement accounts, this rarely happens. Only five percent of people will go out on their own and open an IRA, and the numbers haven’t changed in decades. Yet, we do know Americans are 15 times more likely to save when they can do so at work.

Nearly 60% of working age households do not own any retirement account assets – meaning no employer-sponsored 401(k), no IRAs, and no pension.

For near retirement households (ages 55-64) that do have retirement accounts, nearly 7 in 10 have less than a year’s income saved for retirement, which is way below what they will need to have a secure future.

AARP Massachusetts believes Work & Save programs are a good idea and will build on the work done in this legislative session.

If you think this is a good idea and would like to join in the fight, let us know. Send us an email to ma@aarp.org. AARP advocates for what matters most to the more than 100 million Americans 50-plus and their families: health security, financial stability and personal fulfillment. Join us in the fight. AARP advocacy volunteers partner with staff at the state and federal levels to influence important legislative issues. You can sign up to be an E-advocate at www.aarp.org/getinvolved.