Work and Save is a Win-Win

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 in the US.

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 plan 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 South Carolina residents 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 Carolinaians 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.

Making retirement saving simpler and portable is a win-win for working South Carolinians, small business owners and the state's taxpayers. In a recent survey of South Carolina small business owners, 64% said they would offer a retirement plan if it were easier and less costly to implement. AARP believes a Work and Save plan makes it easier for businesses to create a private retirement savings account for employees. Giving employees a simple way to save for retirement will also mean fewer Americans will need to rely on government safety net services, which will save taxpayer dollars.

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