Legislation Assists New Jersey Workers Save for Retirement

According to David John and Gary Keonig, authors of the 2015 AARP Public Policy Institute Study, “Workplace Retirement Plans Will Help Workers Build Economic Security,” over half of New Jersey workers – 1. 7 million people – do not have access to a retirement savings plan through their employer.  The study’s authors warn that Social Security is critical to retirement security of Older Americans but does not provide enough for an individual to depend on during their retirement.  They note that the average Social Security benefit for age 65 and over beneficiaries is about $19,000 a year, though on average older New Jersey families spend $23,000 a year for food, electric, gas and water, and health care alone.

In her August 14 AARP blog posting, Ivaliese Chihimie, of AARP New Jersey says “the math is clear and convincing…..New Jersey families cannot rely on Social Security alone for a secure financial future.”

That is why AARP New Jersey is urging lawmakers to pass, New Jersey Assemblyman Roy Freiman’s Bill A4134, the New Jersey Secure Choice Savings Program, and help New Jersey workers grow their retirement savings so they can take control of their financial future, says Chihimie. “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 to supplement Social Security so they can maintain financial independence in their later retirement,” she notes.

Bill Helps New Jersey Workers Grow Their Retirement Savings

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, says Chihimie citing an AARP Public Policy Institute report, detailing the March 2017 Current Population Survey, from the U.S. Bureau of the Census.