Today, a secure retirement is out of reach for thousands of Coloradans, especially those who work for small businesses.
AARP Colorado is supporting a bill that would increase the number of working Coloradans enrolled in retirement plans by creating a retirement savings strategy through employers who currently do not offer a work-place retirement plan.
The purpose of HB 1403, the Colorado Secure Savings Plan, is to help promote greater retirement savings for employees in a convenient, low-cost manner that allows workers to move their plan from job-to-job. The opportunity to join is voluntary in the form of an automatic enrollment via payroll deduction.
“This helps low-wage workers – often young people who don’t typically seek out financial planners, or work for companies that have a work-based retirement savings plan – to save for their retirement and take advantage of compounded interest over time,” said Angela Cortez, AARP Colorado spokeswoman. “Too many times, we hear from older adults who have Social Security as their only income source. We want to see people have some additional savings and we know that the simplest way to do this is through an automatic payroll deduction.”
Consider the following:
- Nearly half of Baby Boomers and Gen-Xers will lack the income to meet the basic retirement expenses and health care costs.
- More than 70 percent of workers employed by businesses with fewer than 100 employees do not have a pension or retirement plan.
- The typical working-age household has only $3,000 in retirement assets and retirement households only have $12,000.
- The average monthly Social Security benefit in Colorado is only $1,235 per month. While Social Security is a critical piece of the puzzle, it is not enough savings to ensure people can live independently as they get older.
The Colorado Secure Savings Plan offers financial freedom, Cortez said. Social Security isn’t enough to depend on. The Colorado Secure Savings Plan makes it easier to save.
Again, accounts are voluntary. It is up to the employee to decide if he or she wants to participate. The account follows the employee, so in the case of a job switch, the plan stays with the worker. The employee always has control.
What’s more, the plan saves tax-payer dollars, Cortez said.
“Giving employees a simple way to save for retirement will mean fewer Coloradans will need to rely on government safety-net services, which will save taxpayer dollars,” she said.
AARP Colorado is asking residents to get involved and let their legislators know that the Colorado Secure Savings Plan makes sense. Visit www.action.aarp.org/SecureRetirementCo for more information.