Secure Choice: Building a more secure financial future for New Jersey workers

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Over half of New Jersey workers – 1. 7 million people - do not have access to a retirement savings plan through their employer. [1]  Programs such as Social Security are critical to retirement security but do not provide enough for an individual to depend on during their retirement.  The average Social Security benefit for a 65+ family is about $19,000 a year, though on average older New Jersey families spend $23,000 a year of food, utilities, and health care alone. [2]  The math is clear…..New Jersey families cannot rely on Social Security alone for a secure financial future.

That is why AARP is urging lawmakers to pass Senate Bill 2891, the New Jersey Secure Choice Savings Program Act, and help New Jersey workers grow their retirement savings so they can take control of their financial future. The Secure Choice Savings Program provides a simple and easy pathway for workers to save for retirement out of their regular paycheck and grow additional savings they need so they can maintain financial independence in retirement.

The Secure Choice Savings Program is a public-private partnership between the state and a professional financial institution. Employers would be able to set up the program for their employees easily and there would be no ongoing costs or risk to the employers or the state.  The program is voluntary for employees - they decide if they want to contribute and how much to contribute. The accounts are portable, meaning the employee takes the account with them from job to job, and contributions are made pre-tax with an automatic deduction from the employee’s paycheck.

The bottom line is that workers are 15 times more likely to save for retirement when they can do so at work.  They are 20 times more likely to save if their workplace plan is automatic. [3]  The NJ Secure Choice Savings Program allows workers to easily save for their retirement, so they can take maintain financial independence in retirement.

[1] David John and Gary Keonig, “Workplace Retirement Plans Will Help Workers Build Economic Security,” AARP Public Policy Institute, 2015. https://www.aarp.org/content/dam/aarp/ppi/2015-08/aarp-new-jersey-fact-sheet.pdf

[2] David John and Gary Keonig, “Workplace Retirement Plans Will Help Workers Build Economic Security,” AARP Public Policy Institute, 2015. https://www.aarp.org/content/dam/aarp/ppi/2015-08/aarp-new-jersey-fact-sheet.pdf

[3] AARP Public Policy Institute estimates from the March 2017 Current Population Survey, U.S. Bureau of the Census.