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Nationwide, nearly 1/3 of people nearing retirement do not have a single dollar saved. And, the burden of paying for those retirements could fall on the taxpayer. Now, Pennsylvania’s State Treasurer is proposing a solution.
Pennsylvania has the fifth largest population over the age of 65 in the country, but many of them are marching toward retirement without money set aside for it.
State Treasurer Joe Torsella tells us, “We have here in Pennsylvania, as we have around the country, a crisis of retirement security.”
Torsella says without a change, taxpayers could be left holding the bill.
“It’s going to cost all of us $15 billion in additional state assistance costs, from the fact that too many of us have not saved enough money.”
To solve the problem, lawmakers are looking at jobs. A recent ‘Retirement Security Task Force’ report finds more than 2 million Pennsylvanians have no access to a retirement savings program through their work. Without that access, only 1 in 20 workers will open an account on their own.
Torsella says, “It’s human nature. If you don’t have an easy ‘set and forget it’ way of saving, you probably won’t.”
Which is why he is recommending the creation of an ‘Auto-IRA’ program.
“That then follows that employee around from job to job, through the rest of their life. It fundamentally is a way to simply make it easy for people to save their own money.”
The Auto-IRA program would be facilitated by the state. Once employers opt in, all employees would be automatically enrolled.
Torsella says, “We can set two million people on the road to the retirement that they deserve. And, oh, by the way, make budget time easier here in the Commonwealth.”
Employees would have the ability to opt out of the program. Bills to establish it are expected to be introduced in the coming weeks.