AARP South Carolina believes that today, a secure retirement is out of reach for millions of Americans, especially those who work for small businesses. According to the National Institute on Retirement Security, the conservative estimate of the total U.S. retirement savings deficit is $6.8 trillion. Nearly half of workers age fifty and older have less than $25,000 in savings and investments. The average 401(k) account balance in South Carolina is $20,630, ranked 50th worst in the United States.
One of the best ways we can help people save is through the workplace. According to the AARP Public Policy Institute, workers are 15 times more likely to save for retirement if employer offers a payroll deduction than if they must find an IRA on their own. Unfortunately 54% of South Carolina employees or 827,000 individuals have no access to saving through their employer.
So how can we make it easier for Americans to save so they can live the lives they want in retirement? One answer is a Work and Save Plan. Work and Save plans call on small business employers, currently not offering a savings plan at work, to simply set up a payroll deduction for employees to save for retirement. Employees would have the choice if they want to participate and how much to invest in their future. The State of South Carolina or a third party administrator would set up a vehicle by which employees could save.
The bottom line is that AARP wants to ensure working South Carolinians have the retirement savings they need to live independently in their own home as they grow older. If they work hard, plan, and make responsible financial decisions, a safe and secure retirement should be within reach. And there’s a cost to the state when workers retire in poverty, Work and Save plans are bi-partisan solution to help workers, employers and the state.
To learn more about South Carolina’s Work and Save plan click here.