Now, a bill before the State Legislature would implement a new system to make it easier for the self-employed and people who work for private employers with no retirement savings program to save money for age 65 and beyond.
The average working household in Maine currently has just $2,500 in retirement savings. 235,000 Mainers, or 46 percent of workers age 18 to 64, have no access to a retirement savings program through an employer, according to AARP.
"For these workers, each passing second means less time to establish and nurture the savings that they need for a secure future," says AARP Maine State Director, Lori Parham.
Parham, along with a large contingent of AARP Maine volunteers and advocates, recently participated in a news conference at the State House to press for LD 594, “An Act To Promote Individual Savings Accounts through a Public-Private Partnership.”
If you are a small business owner and you would like to learn more about how LD 594 can help your employees save for retirement, please join AARP Maine on Wednesday, February 5th at noon for a policy briefing. You’ll learn how to improve retirement security for Mainers and what that means for small business owners like you. This webinar briefing offers a chance for individuals to learn more about LD 594 and the opportunity to share your perspective. Parham will host the event, and you can register for the webinar here.
LD 594 would make it easy for Maine businesses to offer their employees a way to save for retirement through payroll deduction. Enrollment would be automatic unless an employee opted out.
"People tend to do things that are easy to do. This is an effort to try and make this as easy as we can," said the bill’s sponsor, State Senate Assistant Majority Leader Eloise Vitelli (D-Sagadahoc).
A recent AARP survey of registered Maine voters showed wide support for a public-private managed state retirement savings option. A high percentage (86%) agree that elected officials should support legislation that would make it easier for small businesses to offer employees a way to save for retirement. The vast majority (84%) of respondents with no current access to an employer savings plan said it was likely they would take advantage of an employer- offered savings plan.
Mark Iwry, a senior fellow at the Brookings Institute who previously worked for the U.S. Treasury Department, spoke at the State House news conference. He said that while nationally 75 percent of U.S. employees enroll in retirement savings programs when they are offered, the rate exceeds 90 percent when enrollment is automatic.
Iwry, Vitelli, and other bill proponents say this kind of “work and save” fund would be portable when someone changed jobs: the employee owns it.
Maine State Treasurer, Henry Beck, who supports the legislation, says increasing seniors’ retirement funds would save the state money down the road. “They can rely on their savings as opposed to state assistance,” Beck said.
A report released by the University of Maine showed a cost to Maine taxpayers of close to 3.3 million if we see no change in saving for retirement by 2030.
For more information about LD 594, visit www.aarp.org/me or send an email to firstname.lastname@example.org.