A Plan to Boost Saving at Work

By Melissa Preddy

Entrepreneur Danielle Smith wants to offer a retirement savings plan to her staff of five, but so far costs and logistics have been prohibitive.

“I’ve been talking with a financial adviser about how to manage it,” said Smith, 35, who in 2013 founded Detroit Maid, a cleaning service in southeast Michigan. Her cleaners range from their 20s to their 40s, and most are women, who typically lag in saving for their older years.

“My mission is to offer the most positive work experience, such as flexible schedules for moms, but we’re just getting our feet wet with benefits,” Smith said. “A retirement program would be invaluable.”

Helping small businesses and their employees is one of the issues AARP Michigan will be championing when the Legislature reconvenes Jan. 11. Nearly 1.7 million workers in the state lack access to an employer-sponsored savings plan, and only 53 percent of full-time Michigan workers participate in an employer plan. The situation is even more dire for part-time workers, with participation at 19 percent.

Workers can open IRAs or other self-managed accounts on their own, “but in reality, only about 5 percent do,” said Lisa Dedden Cooper, manager of advocacy for AARP Michigan. “It makes a big difference if payroll deduction is offered through the workplace.”

Dedden Cooper and her colleagues will meet with state lawmakers and small-business groups, hoping to develop a Michigan-specific solution that works for employers and employees.

Advocates will discuss plans that at least seven states have enacted, ranging from automatic enrollment of workers into a Roth IRA to a marketplace featuring financial products.

“We are hoping to build recognition that there is a need,” leading to a bill later this year, Dedden Cooper said. She noted that 76 percent of the state’s small-business owners who were surveyed in 2016 said legislators should make it easier for them to offer workers a way to save for retirement.

AARP Michigan won’t back any bill that involves mandated action by employers, which could undermine business support for the plan.

Help for caregivers
Also this year, AARP Michigan will seek more resources for family caregivers of older adults or those with dementia and other chronic conditions. AARP championed the CARE Act, which took effect in July and requires health care providers to work with designated caregivers on patient discharge plans.

This year, Dedden Cooper said, advocates will focus on more funding and better access for home care that can provide services for patients and respite for caregivers.

In 2016, an extra $2.5 million in state funding was allocated for home- and community-based services, and “we will continue advocating to increase access and reduce wait lists throughout the state,” she said.

Telemedicine is another AARP-supported initiative that may ease life for patients and caregivers alike.

“A lot of our communities in Michigan are rural. If mobility is an issue and you are 45 miles from a hospital, that’s a problem,” Dedden Cooper said. “With new technology, doctors can check blood pressure and do other assessments online. It’s like FaceTiming with your primary care physician.”

Melissa Preddy is a writer living in Plymouth, Mich.