ST.PAUL -- AARP Minnesota today unveiled a statewide survey that showed a growing concern over retirement savings in the Gopher State. The survey engaged 1,000 Minnesotans over the age of 45 and found that 76 percent felt that they have not yet saved enough to retire and 72 percent support the idea of a state created retirement plan for those who lack access at their place of work.
These results closely match national savings trends. Nationally, the typical working-age household has only $3,000 in retirement assets, while near-retirement households only have $12,000. This growing savings gap is made worse by a decline in access to workplace savings plans. Currently in Minnesota, close to 40 percent of all workers – and 22 percent of those 45 years of age and older -- do not have access to a retirement savings plan at their place of work.
“Traditionally we’ve looked at financial security in retirement as a three legged stool. In order to live the life you’ve planned for you needed a pension, private savings and Social Security,” said Jim Scheibel, AARP Volunteer State President. “Unfortunately, we’ve seen 2 of those legs erode over time as fewer people have access to pensions, and private savings have suffered during the recession.”
Two Minnesota legislators, Sen. Sandy Pappas and Rep. Patti Fritz, have introduced legislation to create a new private savings plan. The Minnesota Secure Choice Act (SF 2078 / HF2419) would start the process of identifying a convenient way for people to save on the job and to continue to save if they change jobs. It would be a voluntary investment plan – similar to the state’s 529 college savings fund – that individuals could invest their own money into if they don’t have access to a plan at work.
“We know that fewer and fewer people have access to work place savings plans, which means it's time to chart a new course and create new models to help people save,” said Sen. Pappas. “The private market simply isn’t working for today’s consumers and small employers, who often find it difficult to shop for plans and avoid high fees.”
“People aren’t against saving. Too many simply lack the opportunity,” said Rep. Fritz. “If we do nothing, too many people will never have the chance to retire at all. We must create a new generation of investors. The Minnesota Secure Choice Plan is an important first step.”