New Bill Helps People Save For Retirement

April 26, 2016

Legislation I’ve been working on for five years to help people save for retirement has finally been approved by the House and is now in the Senate.

This is a purely voluntary program intended to help an estimated the 600,000 Connecticut residents who work for businesses that do not allow employees to have money deducted from their paycheck and placed in a Roth IRA savings account for when they retire.

If there is one organization in the country that looks out for senior citizens it is AARP, which has strongly backed the legislation, House Bill 5591, An Act Creating the CT Retirement Security Program. The fact that AARP supports this program speaks volumes.

Here’s what AARP Connecticut Director Nora Duncan has to say about the bill:

“The impact of this legislation is astronomical. We’ve found that people are 15 times more likely to save for retirement when they have a payroll deduction option, and when they have a real retirement savings they are less likely to have to rely on government assistance and safety-net programs when they can no longer work.

“And the beauty of the retirement savings program is that it’s totally optional. No one is being forced to participate. And if they do choose to participate, they can drop out at any time if circumstances change.”

The program will not cost the state any money and will be totally funded by a small percentage of the participants’ contributions. The startup costs will be borne by the participating institution chosen by the state to administer the program and businesses will not be forced to contribute to the accounts.

This savings program is going to make a big difference for the people who have no easy way to save for retirement. People who choose to participate are going to have their savings start automatically and as long as the don't stop before they retire they're going to have some serious money for retirement. They won't be facing poverty with only their Social Security to count on.

A study done by the Schwartz Center for Economic Policy found that more than four out of 10 workers in Connecticut do not have access to a retirement plan at work and the number is increasing. There is an entire generation of employees, many of them lifelong hard-working middle class people, who are headed to retirement financially unequipped, in part due to lack of access to a workplace-based retirement savings option.

In the final analysis, this savings program for workers will help not only the individual employees but also the state as a whole.